Delhivery Limited , India's largest fully integrated logistics service provider, has announced plans to expand its international presence by incorporating step-down wholly owned subsidiaries in the United Kingdom and United Arab Emirates. The move, approved by the company's Board of Directors, aims to strengthen Delhivery's global logistics capabilities and enhance its supply chain solutions.

Key Details of the Expansion

• The new subsidiaries will be owned by Delhivery Singapore Pte. Ltd., a wholly owned subsidiary of Delhivery Limited.
• Both entities will operate in the logistics business, providing supply chain solutions and logistics services.
• Delhivery plans to invest up to INR 5.00 crore in each subsidiary through one or more tranches via 100% subscription to share capital in cash.
• The incorporation is subject to approval from competent authorities.

Strategic Implications

This expansion marks a significant step in Delhivery's international growth strategy. By establishing a presence in the UK and UAE, the company is positioning itself to tap into key global markets and enhance its cross-border logistics capabilities.

Financial Commitment

The company's decision to invest up to INR 5.00 crore in each subsidiary demonstrates its commitment to these new ventures. This investment will likely be used to set up operations, hire local talent, and establish the necessary infrastructure in both countries.

Regulatory Compliance

As noted in the recent LODR (Listing Obligations and Disclosure Requirements) data, Delhivery continues to maintain transparency in its operations and expansion plans. The company recently submitted its Monitoring Agency Report, detailing the utilization of proceeds from its Initial Public Offer (IPO).

Market Position

Delhivery has been experiencing growth, as evidenced by its recent financial results. For the reported quarter, the company reported:

While the company faced a loss of INR 50.49 crore for the quarter, it's important to note that this includes integration costs related to recent acquisitions.

Outlook

The establishment of subsidiaries in the UK and UAE aligns with Delhivery's long-term strategy of becoming a global logistics player. As the company continues to expand its international footprint, it may leverage its technology-driven approach and extensive experience in the Indian market to compete in these new territories.

The move comes at a time when global supply chains are evolving, and there's an increasing demand for efficient, technology-enabled logistics solutions. Delhivery's expansion into these strategic locations could potentially open up new revenue streams and partnership opportunities in the international logistics sector.

As Delhivery awaits regulatory approvals for these new subsidiaries, the logistics industry will be watching closely to see how this expansion unfolds and impacts the company's global market position.

Delhivery has announced its financial results for the second quarter, showing mixed performance with revenue growth but a wider net loss.

Financial Highlights

For Q2, Delhivery reported:

• Revenue from services of ₹2,559.00 crore, a 16.8% year-over-year increase from ₹2,190.00 crore in the same quarter of the previous year.
• Net loss of ₹504.00 million, significantly higher than the ₹102.00 million loss in the same period last year.
• EBITDA of ₹682.00 million, up from ₹573.00 million in the previous year, with the EBITDA margin slightly improving to 2.66% from 2.62%.

Business Segment Performance

Express Parcel

• Shipment volumes reached 246 million, a 32% year-over-year growth from 185 million in the previous year's quarter.
• Revenue increased by 24% year-over-year to ₹1,611.00 crore.
• Service EBITDA margin stood at 15.3%, slightly higher than the 15.1% in the same quarter last year.

Part Truck Load (PTL)

• Tonnage grew by 12% year-over-year to 477,000 MT.
• Revenue increased by 15% year-over-year to ₹546.00 crore.
• Service EBITDA margin improved to 8.5% from 2.9% in the corresponding quarter of the previous year.

Ecom Express Integration Update

Delhivery completed the acquisition of Ecom Express on July 18. The integration process is underway with the following updates:

• Volume manifestation at Ecom ceased during Q1, and exit of non-express businesses is in progress.
• Network rationalization plan is completed, with net retention of 7 facilities for long-term Delhivery usage.
• Integration cost incurred in Q2 was ₹90.00 crore, with total integration costs expected to remain within the previously guided ₹300.00 crore.

New Initiatives

Delhivery is expanding its service offerings:

• Rapid: 20 active stores in 3 cities, with plans to expand to 25 stores. The company has signed its first B2B client, with operations going live in NCR in October.
• Direct: Currently active in Ahmedabad, NCR, and Bengaluru, with plans to launch in 4 more cities.

Freight Index One Launch

In a separate announcement, Delhivery launched the Freight Index One platform, aiming to bring transparency to the Indian logistics market. This open platform provides historical, current, and forward Full Truckload (FTL) pricing estimates for major trucking lanes and vehicle types.

Rohan Anand, Head of Data Science at Delhivery, stated, "Our aim is to bring greater transparency and structured information to India's logistics market at a lane level."

Kapil Bharati, Chief Technology Officer, added, "Providing access to a wide variety of stakeholders will allow efficient price benchmarking and enable customers to better plan budgets and negotiate rates using market-wide data."

The launch of Freight Index One demonstrates Delhivery's commitment to innovation and improving efficiency in the logistics sector.

Delhivery's Q2 results show revenue growth and improved EBITDA, despite a wider net loss. The company continues to focus on strategic initiatives like the Ecom Express integration and the launch of Freight Index One, aiming to strengthen its position in the Indian logistics market.