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.

Delhivery , a leading logistics and supply chain services company, has reported significant positive developments in its fourth quarter results, leading to a surge in its stock price.

Q4 Financial Highlights and Stock Performance

• Stock Movement: Delhivery's stock hit a 10% upper circuit following the Q4 results announcement.
• Net Profit: Delhivery posted a consolidated net profit of ₹73.00 crore, compared to a loss in the same quarter of the previous year.
• Revenue: Revenue stood at ₹2,192.00 crore, up 5.6% year-on-year.
• EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) surged 160% year-on-year to ₹119.00 crore, with margin expansion to 2.5%.
• Part Truck Load Volume: Reported a 19% growth, contributing to the positive sentiment.

Full-Year Performance

• Revenue: Full-year revenue grew 10% to ₹8,932.00 crore.
• Net Profit: The company reported a profit of ₹162.00 crore for the entire fiscal year.

Market Response and Analyst Outlook

The strong Q4 results have led to a bullish outlook from several brokerages:

• Goldman Sachs, Citi, and Investec have raised their target prices for Delhivery's stock.
• The stock rose 9.99% to ₹352.90, reflecting investor confidence in the company's performance.

Financial Performance Overview

The latest financial results indicate a positive shift in Delhivery's profitability. The company has not only managed to turn its losses into profits but has also shown consistent improvement in its financial metrics.

The substantial improvement in net profit and EBITDA, along with steady revenue growth and increased Part Truck Load volume, suggests that Delhivery's strategic initiatives and operational efficiencies are yielding positive results. The company's ability to grow its revenue while significantly improving its bottom line is a promising sign for its shareholders and stakeholders.

The logistics sector has been experiencing growth and transformation, particularly in the e-commerce-driven last-mile delivery segment. Delhivery's improved financial performance and the resulting positive market response could be indicative of its successful adaptation to these market dynamics.

As Delhivery continues to navigate the competitive logistics landscape, investors and industry observers will likely keep a close watch on the company's ability to maintain this positive momentum in the coming quarters. The bullish stance from major brokerages further underscores the market's confidence in Delhivery's growth prospects.