Delhivery , a prominent player in the Indian logistics sector, has announced a significant strategic decision to dissolve its operations in the United Kingdom. This move comes as part of the company's broader restructuring initiative, signaling a shift in its international business strategy.

Strategic Restructuring

The logistics giant has decided to discontinue operations of its division in the United Kingdom. This decision appears to be a calculated step in Delhivery's ongoing efforts to streamline its global operations and focus on core markets.

Implications for the Company

While the full implications of this move are yet to be seen, it's clear that Delhivery is taking decisive action to optimize its international presence. The dissolution of the UK unit could potentially allow the company to reallocate resources to more profitable or strategic areas of its business.

Looking Ahead

As Delhivery implements this significant change, stakeholders will be keen to observe how this restructuring impacts the company's overall performance and global strategy. The move raises questions about the company's future plans for international expansion and its focus on the domestic Indian market.

Delhivery's decision to exit the UK market underscores the dynamic nature of the global logistics industry and the need for companies to adapt to changing market conditions. As the situation develops, more details may emerge about the reasoning behind this strategic shift and its potential impact on Delhivery's long-term growth prospects.

Delhivery , a leading logistics and supply chain services provider in India, has shared key insights into its future business strategies during a recent conference call. The company has outlined plans for improving working capital efficiency, optimizing capital expenditure (CAPEX), and enhancing EBITDA margins in its part truckload business.

Working Capital Optimization

Delhivery has set its sights on improving working capital efficiency over the next few years. The company expects to reduce working capital days by 1-2 days over the course of the next 2-3 years. This improvement is anticipated to be particularly noticeable in the supply chain services segment of its business.

CAPEX Targets and Projections

The logistics giant has provided a clear roadmap for its capital expenditure:

• Long-term CAPEX targets are expected to be achieved by fiscal year 2027 (FY '27).
• CAPEX is projected to decrease from the current level of 5.00% to around 4.00%.
• The company's long-term guidance for CAPEX is set between 3.50% to 4.00% of revenue.
• Delhivery foresees minimal CAPEX on automation equipment over the next two to three years.

EBITDA Margin Improvements

In its part truckload business, Delhivery anticipates continued improvement in service EBITDA margins. This optimistic outlook is based on two key factors:

1. Ongoing pricing revisions
2. Renegotiation of contracts

These strategic moves are expected to positively impact the company's profitability in this segment.

Long-term CAPEX Intensity

Looking ahead, Delhivery projects that its CAPEX intensity will remain largely stable in the near term. However, the company expects a gradual tapering towards its long-term target of 3.50% to 4.00% of revenue.

This guidance from Delhivery provides investors and industry observers with valuable insights into the company's operational strategies and financial management plans. As the logistics sector continues to evolve, Delhivery's focus on optimizing working capital, managing CAPEX, and improving margins could potentially strengthen its position in the market.