- Delhivery is the largest and fastest-growing fully-integrated logistics services player in India by revenue as of Fiscal 2021
- Delhivery operates a pan-India network and provides its services in 17,488 PIN codes, as of December 31, 2021
- Delhivery acquired Spoton in August 2021 to further scale its PTL freight services business. Spoton delivered 758,730 tonnes of freight in Fiscal 2021 and had a network presence across 13,087 PIN codes with 2.85 msf of infrastructure as of December 31, 2021.
Indian logistics had a direct spend of $216 billion in the fiscal year 2020
Expected to reach $365 billion in the year 2026
Growth cagr expected at 9%
Factors that drive growth in this industry:
- E-Commerce, B2C culture
- Favourable legal support
- Increased spending on logistic services
- Underlying growth of the Indian economy which in turn rise demand for goods which requires logistics
Organised players accounted for only ~3.5% of the logistics market for fiscal year 2020
The Indian logistics industry is characterised by high indirect spends on account of high inventory carrying costs, pilferage, damage and wastage. Indirect spends were estimated at US$174 billion in Fiscal 2020 and are expected to marginally decline to US$166 billion by Fiscal 2026.
Road segment is the largest mode of logistics in India.
- The total road transportation market was estimated at US$124 billion in Fiscal 2020 and is expected to grow at a CAGR of ~8% to reach US$200 billion in Fiscal 2026.
- Express Parcel: Fastest growing segment of Road Transportation
- Key trends: E-Commerce, Category expansion, New payment methods, New business methods, Value added services.
- Part Truckload (PTL) Freight: Rapidly shifting towards Organised Players
- Key factors: Changes in supply chain structures, customer expectations, Infrastructure improvements,Technology, Category expansion.
- Truckload Freight: Largest segment of Road Transportation
- The TL market has been historically fragmented
- High Intermediary costs
- Inefficient matching of supply and demand
- Possible Changes that could bring opportunities:
- Digitalisation of supply chain operations
- Real time visibility and control
- Data led efficiency
The domestic rail transportation market stood at a size of ~US$21 billion in Fiscal 2020, which is expected to reach US$47 billion by Fiscal 2026 at a CAGR of 17%.
- Rail’s share in freight has been continuously declining,CAGR standing at 18% in 2020 (versus 71% for road transportation).
DOMESTIC AIR EXPRESS TRANSPORTATION: NICHE SEGMENT WITH LIMITED GROWTH
Waterways isn’t opted by the company
- India had a per capita warehousing stock of 0.02 sq. m. as of 2020.
- While warehousing space taken up fell 11% YoY in Fiscal 2020, overall warehousing market growth has been robust, at 44% CAGR during Fiscal 2017- 2020.
- Demand for warehousing is being driven by rapid growth in e-commerce, organised retail, manufacturing and international trade.
Value objective: “To enable customers to operate flexible, reliable and resilient supply chains at the lowest costs.”
Active customer base of the company can be found across a diverse spectrum of :
- Consumer durables
- Consumer electronics
- Automotive and manufacturing
- Integrated solutions: Provides a full range of logistics services
- including express parcel delivery, heavy goods delivery, PTL freight, TL freight, warehousing, supply chain solutions, cross-border express and freight services and supply chain software, along with value added services such as ecommerce return services, payment collection and processing, installation and assembly services and fraud detection.
- Proprietary logistics operating system: The in-house logistics technology stack is built to meet the dynamic needs of modern supply chains.
- Has over 80 Applications
- Asset-light operations: We follow an asset-light model. As of December 31, 2021, all of our logistics facilities were leased from third parties.
- A history of losses and negative cash flows from operating, investing and financing activities and we may continue to experience losses and negative cash flows in the future as we anticipate increased expenses in the future.
- incurred restated losses for the year/period of ₹17,833.04 million, ₹2,689.26 million, ₹4,157.43 million, ₹2,974.92 million and ₹8,911.39 million in Fiscal 2019, Fiscal 2020 and Fiscal 2021 and the nine month periods ended December 31, 2020 and December 31, 2021, respectively.
- Negative cash flows from operating, investing and financing activities
- Relies on technology a lot for its operations and won’t be able to survive without constant upgradation
- Issue for sale is not appraised by any financial institutions or banks. Only the fresh issue is to bring in funds. Shows that the funding and deployment of said funds is not viable according to the banks
- High employee costs
- Dependency on third parties and travel partners
- Competitive pricing makes profitable numbers impossible on the market, meaning very few chances to carry out a profitable trade.
- Contingent liabilities that can destabilise the company on maturing
- Operate in a highly fragmented industry and face intense competition, which could adversely affect our results of operations and market share.
- Major part of the business is with limited huge consumers , whose actions would affect the company
- Defaults of payment by consumer would seriously affect cash flow in the business
- Equipments used in business including vehicles are leased failure to renew which would materially affect the business
- Insurance may be insufficient to cover all losses associated with our business operation
Disclosure: No positions