Delhivery Limited

rs,

dees, this earnings call is meant only for the existing holders of Delhivery, for potential investors, and for research analysts to discuss the company's financial results. This call is not for media pe

Rs. 7,240 crore

Delhivery is nearly a billion dollars in revenue as of financial '22 with total revenues of about Rs. 7,240 crores. We are the fastest growing and the largest logistics platform in the country, having grown at ne

60%

are the fastest growing and the largest logistics platform in the country, having grown at nearly 60% annually between financial '19 and financial '22. More importantly, while revenue growth has been

1%

also broken even as of financial '22 on an adjusted EBITDA margin level with an adjusted EBITDA of 1% for financial '22. Since we've launched, we've delivered over 1.4 billion orders as part of our ex

1.4 billion

level with an adjusted EBITDA of 1% for financial '22. Since we've launched, we've delivered over 1.4 billion orders as part of our express parcel delivery business, which is the largest segment within our ov

25%

s the largest segment within our overall revenues, which gives us a market share of between 24 and 25% in the e-commerce parcel delivery market, making us by far the single largest independent third pa

2 million

n two services from Delhivery. Apart from our express delivery business, we've also delivered over 2 million tons of part- truckload freight, and post our integration with Spoton Logistics, which we acquired

18 million

perating system and platform, and that is powered by vast amounts of data. Our network covers over 18 million square feet of logistics infrastructure, which includes fulfillment centers, automated sortation c

Rs. 60 Crore

Delhivery was merely to scale the existing network, as can be seen by growth in our revenues from Rs. 60 Crores to nearly Rs. 500 Crores in this period. This was also the time when we began automation of our n

Rs. 500 Crore

scale the existing network, as can be seen by growth in our revenues from Rs. 60 Crores to nearly Rs. 500 Crores in this period. This was also the time when we began automation of our network heavily, building

Rs. 7,200 Crore

d at which traditional logistics companies in India have grown.And have reached an overall size of Rs. 7,200 Crores. Most logistics companies in this period have been growing at more or less the nominal GDP growth

9.5%

ogistics companies in this period have been growing at more or less the nominal GDP growth rate of 9.5%. So, Delhivery is not only the largest and the fastest growing logistics company in this space, bu

“In India while the secular growth of e-commerce has continued, we expect there to be certain disruptions to operations of individual players due to volatility in demand coming from rising customer acquisition costs.”

“And with an increase in input costs, we also expect in the medium term there to be an impact on wage inflation, and a corresponding talent shortage that will affect not just logistics companies, but companies across sectors.”

“7,200 Crores as of financial '22 at a CAGR of about 64%.”

“As the Delhivery model continues to grow, as we continue to grow our transportation and warehousing businesses, we expect these adjusted EBITDA margins to improve with scale.”

“Our CapEx as a percentage of revenue has come down from 9% in financial '19 to 6.8% in financial '22, and our expectation in the medium term is that this will settle at about 5% and in the long term, at close to about three and a half to 4% of revenue.”

“And in the last four years have invested across our teams in Seattle and Hyderabad in re-architecting to build a logistics platform that will be opened up for global application developers starting this year, and will allow both Delhivery and other entities to build SaaS businesses to offer for supply chain problems across the world.”

“In terms of growth initiatives going forward in the near term, the first important initiative for us this year will be to continue to integrate the Delhivery and the Spoton networks.”

“We expect to realize network synergies as we integrate operations between the two networks by the third quarter of this year, and launch our new service, which is the Economy PTL service, which is aimed at the larger segment within the Less Than Truckload market.”

“We expect to add close to about four million square feet of infrastructure this year.”

“We also expect to expand our fleet of tractor trailers.”

Sahil Barua

25

Sougata Basu

14

Abhishek Ghosh

5

Sachin Salgaonkar

4

Alok Deshpande

3

Venugopal Garre

3

Aditya Mongia

3

Sachin Dixit

3

Mukesh Saraf

1

Sougata Basu

Thank you everybody for joining on behalf of the Citi Equities team. I welcome you all to this first earnings call of Delhivery to discuss its financial results for the quarter, and the financial year ended March 31st, 2022. From Delhivery's management team, we are joined today by Sahil Barua, Chief Executive Officer, Sandeep Barasia, Chief Business Officer, and Amit Agarwal, CFO. Before we begin, a few announcements for all the attendees, this earnings call is meant only for the existing holders of Delhivery, for potential investors, and for research analysts to discuss the company's financial results. This call is not for media personnel. If any media representatives are attending this call, request you to kindly drop off the call at this point. This call will be recorded. It is scheduled for 60 minutes and we'll have a short presentation by the management team, followed by Q&A. For Q&A, there are two options. You can use the chat box on your screen to enter your questions, which we

Sahil Barua

Thank you. Welcome to all of you, and thank you for joining our first earnings call as a public company. We're very excited to have you all here. The way we'll do this is to do a short presentation from the company for about 25 minutes and then open up for Q&A.

Sahil Barua

So, the idea behind Delhivery fundamentally is to build the operating system for commerce in India. By this, we mean we provide the logistics services, the infrastructure, and the technology, that allow buyers and sellers to transact with each other. These buyers and sellers could be businesses transacting with other businesses, businesses transacting with consumers, or consumers transacting with consumers, both within India, or from India to the rest of the world, or the rest of the world to India. Where Delhivery has reached today in 11 years, a quick snapshot follows in the next slide today. Delhivery is nearly a billion dollars in revenue as of financial '22 with total revenues of about Rs. 7,240 crores. We are the fastest growing and the largest logistics platform in the country, having grown at nearly 60% annually between financial '19 and financial '22. More importantly, while revenue growth has been robust and revenue diversification has been robust, the business has also broke

Sachin Salgaonkar

Hi, thank you for the opportunity. Congrats on a great set of numbers, and Sahil and team, thanks for the detailed disclosures in the presentation. I have three questions. First question is on the revenue growth outlook drivers. Now this is in context of quite a few of the eCommerce platforms spending less and selling in marketing, discretionary spends on eCommerce platform by consumers coming down. And I did hear in your opening remarks you mentioning about disruption to some of the companies. So just wanted to understand between the pricing and volume mix, how should we look at the growth going ahead? And what kind of a growth versus compared to industry growth, should we expect for Delhivery's eComm business?

Sahil Barua

Sure. Thanks for the question, Sachin. I think when you look at eCommerce, it's important for us to maintain a mid to long term view. I think when you look at eCommerce as a percentage of total consumption today, it continues to be a very, very small fraction. And the overall shift towards purchasing online continues to be secular and strong. I think what we are seeing, and especially what we've seen in the first two quarters of this year is that individual players, based on sort of their previous strategies may face turbulence going forward, because consumer acquisition costs have obviously gone up and some of them are in relatively crowded verticals. But the secular trend towards buying online, our numbers show, has not shifted as much. Even post-pandemic, while people have talked about the fact that propensity to purchase online has reduced somewhat, the sectors that are affected more are sectors like grocery and food, and much less so the big box eCommerce. Outside of this, I think

Sachin Salgaonkar

Thank you, very clear Sahil. Second question is if you could elaborate a bit more on the impact of high fuel cost on your businesses, as well as the wage inflation impact.