Amid the rising popularity of quick commerce in the country, logistics major Delhivery expects its rapid commerce business to generate INR 80 Cr to INR 100 Cr revenue in the financial year ending March 2025 (FY25)

In the company’s Q3 call, Delhivery CEO Sahil Barua said that the company’s rapid commerce business offers two-hour deliveries and is currently operational in three cities – Bengaluru, Hyderabad, and Chennai.

According to Barua, the rapid commerce segment has gone live with two core customers, with an additional 15 expected to be onboarded within the current quarter.

“The initial performance of dark stores has been promising, with some locations already handling close to 500 orders per day within just 45 days of launch,” said Barua. According to him, the breakeven point for these stores is approximately 700-800 orders per day, and several stores are nearing that threshold.

This comes months after Barua announced that for “rapid in city delivery” for ecommerce companies.

In Friday’s (February 7) call, the CEO said that rapid commerce is positioned as an add-on product targeting the top eight cities, catering to specific SKUs and customer needs.

Additionally, the revenue from this segment is expected to align with the margin structure of the broader ‘express’ business. While its contribution to overall ecommerce remains relatively small, the company views this as a crucial capability to serve D2C brands more effectively.

Notably, on the financial front, the EBITDA margin of express service remained muted in Q2 and Q3.

According to Barua, this was due to fixed investments, including in a new facility in Bengaluru, as well as higher fleet costs in metro cities during peak demand periods.

“These factors contributed to a revenue impact of INR 12-15 Cr. However, the company remains confident of achieving stable EBITDA margins in the 18-20% range moving forward,” said Barua.

The Delhivery cofounder said that there are “too many players in the express parcel business, and this industry has to consolidate”.

“I believe this industry is facing a reckoning. The reality is that we had a similar discussion last year about how long these losses can be sustained. Now, incremental capital flow into the industry is becoming severely constrained,” he said.

He believes that to sustain themselves as going concerns, companies will need to reassess their business models. “… I expect the structure to shift in favour of Delhivery. For instance, if we were at X percent of the overall profit pool in Q2, that figure increased in Q3. Structurally, we see no reason why it wouldn’t continue to rise.”

Earlier today, Delhivery reported a in Q3 FY25 from INR 11.7 Cr in the year-ago quarter. Operating revenue rose more than 8% to INR 2,378.29 Cr from INR 2,194.46 Cr in Q3 FY24.

The company’s EBITDA declined marginally to INR 102 Cr during the quarter under review from INR 109 Cr in Q3 FY24.

Meanwhile, logistics major DTDC also announced its entry into the rapid commerce sector with its “DTDC Express” arm.

Shares of Delhivery ended today’s trading session 1.55% lower at INR 316.75 on the BSE.

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