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Will be top delivery company by revenue: Delhivery

Oct 29, 2020Article Originally Posted By: timesofindia.indiatimes.com

Will be top delivery company by revenue: Delhivery

SoftBank-backed logistics major Delhivery would emerge as the largest supply chain company in India by revenue, its joint MD & chief business officer Sandeep Barasia told TOI. This comes at a time when the company said it’s “ready” for an initial public offering (IPO) in the next 12 months and is considering both Indian and overseas markets for it.

The unicorn (valued at over $1 billion), based on present run-rate, is looking to close the current financial year with Rs 3,700-4,000 crore in revenue, compared to Rs 2,800 crore last year. This is despite the washout months in April and May due to the lockdown. This would put it ahead of market leader like Blue Dart, which recorded a revenue of over Rs 3,166 crore at the end of March 2020, seeing a flat year compared to previous year.

For the year ending March 2018, Blue Dart had a revenue of Rs 2,790 crore. Other leading delhivery companies in the space include FedEx, Ecom Express, Gati and XpressBees.

Will Delhivery overtake Blue Dart in FY21?

Kapil Bharati is one of Delhivery's co-founders and also founded two other startups in 11rupees and contify.com

For the financial year ending March 2019, Delhivery’s revenue and stood at nearly Rs 1,700 crore and Rs 1,781 crore, respectively. The loss numbers for the fiscal year ending March 2020 are not available yet. “We are trying to create the most tech-savvy supply chain company. We are now India’s largest supply chain company. From a run-rate basis, our revenue will make us the largest supply chain company in India,” Barasia said.

Delhivery, according to him, would have reached almost break-even had it not seen the near washout months of April and May this fiscal. Its core e-commerce business has been “extremely profitable”. But Delhivery is making investments in new businesses as it eyes a wider play in the business-to-business (B2B) segment, which has been growing at 100%.

In the current festive season, it is clocking 1.7-1.8 million daily shipments. It works across sectors like consumer electronics, fashion, FMCG and select industrial sectors like auto. Blue Dart, in the previous fiscal, had clocked 42 crore domestic deliveries, while Delhivery said it recorded 27-27.5 crore e-commerce shipments. “Our focus is to continue growing our e-commerce business as the market grows, but the real thrust is making sure our B2B business grows much faster as the opportunity is so large,” said Barasia.

Over 12-24 months, Barasia’s objective is to have an equal contribution from its e-commerce and B2B businesses. Currently, e-commerce business is 63-65% of its total business. He added that the company is looking at acquisition to aid its B2B business. “There is some inorganic opportunity possible for us in the B2B space,” he added.

On its IPO preparations, Barasia said it was ready for one based on the current set of regulations even though the industry expects that the government and regulators like Sebi will announce some changes. “If we are going to list in 12 months, we will list within the realms of whatever the regulations hold true at that point of time. As of now, we are preparing to list based on the current regulatory framework,” added Barasia. He said the company has been doing its “internal homework”, working with audit firms for preparedness for an IPO. It is yet to appoint a banker for the process, but the same will be decided by its board closer to the process.

“There is no doubt Delhivery has shown a phenomenal revenue growth trajectory over the past few years, but the key aspect is whether they have been able to find a route to profitability. Price competition in the e-commerce delivery space has been very intense over the years and that has impacted negatively even the traditional market leaders like Blue Dart,” said Sanjiv Kathuria, a senior industry consultant.