Delhivery likely to improve market share in ecommerce logistics space

Bengaluru, 13 June Logistics firm Delhivery is likely to improve its market share in the ecommerce space with the rolling out of ONDC (Open Network Digital Commerce) and other B2B (business to business) ecommerce companies.

“Uncharacteristically high (compared to peers) brand recall among end-users could make it a key beneficiary of open ended B2B e-commerce marketplaces and ONDC roll out. We believe Delhivery is providing a superior product compared to peers and incremental margin expansion in express parceland PTL businesses will lead to these businesses becoming profitable after tax by FY25,” ICICI Securities wrote in a note.

In its recently concluded analyst meet, the company said it has seen market share gains in express parcel delivery segment as Delhivery issuing technology for creating a competitive advantage in this segment.

The management of the logistics firm has also guided for robust growth in PTL (Partial Truckload) segment given it is a $26 billion market with a large number of unorganized players.

“The company has the lowest cost structure compared to peers across first mile, mid mile and last mile logistics in express parcel business, which provide competitive advantages in a cost-sensitive market. Moreover, technology and trust moat should strengthen its dominant share in niche segments such as secured delivery,” ICICI Securities added in the note.

The brokerage firm also said that strong balance sheet amid tight liquidity position along with hands on management put the company in a good stead for future growth.

Delhivery’s consolidated net loss widened to Rs 159 crore during the fourth quarter ended March 2023 as compared to a loss of Rs 120 crore reported a year ago. Its revenue from operations fell 10 per cent to Rs 1,860 crore during the fourth quarter as compared to Rs 2072 crore in the same quarter a year ago.