Delhivery targets 16-18% Express, 15%+ PTL margins by FY27 exit

Delhivery Limited expects Express service EBITDA margins of 16-18% and part-truckload margins above 15% at FY27 exit. Management linked the outlook to pricing revisions and higher network utilisation after Q2FY27 Express volume grew 32.1% year on year, PTL freight rose 14.2%, and revenue from services reached Rs 3,066 crore.

What margin targets has Delhivery set for FY27 exit?

Delhivery expects Express to end FY27 with a service earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 16-18%, while part-truckload (PTL) service EBITDA margin should exceed 15%. Management expects both margins to expand through Q3FY27, driven by pricing revisions and higher network utilisation.

The targets are exit-rate expectations, rather than disclosed full-year average-margin forecasts. Delhivery expects Q4FY27 to be the peak quarter for PTL, which management says will support high utilisation across that network.

Delhivery reported consolidated adjusted EBITDA of Rs 123 crore, or a 4.0% margin, in Q2FY27, compared with Rs 76 crore and a 2.6% margin in Q1FY27. The consolidated measure includes businesses beyond Express and PTL, so it is not directly comparable with the two service-margin exit targets; reported EBITDA was Rs 205 crore, or 6.7% of revenue from services, in Q2FY27.

Why does Delhivery expect Express and PTL margins to expand?

Delhivery attributes the expected Q3FY27 and FY27-exit margin expansion to price revisions and better use of its network. Express realisations increased 4.1% quarter on quarter in Q2FY27 and PTL realisations increased 5.6%, mainly after fuel-linked price increases triggered by diesel-rate rises in Q1FY27.

The company also completed price revisions in several states to cover minimum-wage inflation in earlier quarters. Management identified rising fuel prices, labour availability, statutory changes including a new labour code, and the scheduled introduction of merchant discount rate charges on Unified Payments Interface payments as operating variables during Q2FY27.

PTL yield improved by about 65 paise quarter on quarter, with management saying fuel-linked revisions accounted for a lesser portion. Delhivery said new-customer acquisition, proactive repricing of existing customers, and an improving customer and shipment profile accounted for a significant remainder of the PTL yield change.

How did Delhivery's volumes and profitability change in Q2FY27?

Delhivery carried 325 million Express shipments in Q2FY27, up 32.1% year on year and 0.8% quarter on quarter, while PTL freight reached 545,000 metric tonnes, up 14.2% year on year and 0.7% sequentially. Revenue from services rose 19.8% year on year and 4.6% quarter on quarter to Rs 3,066 crore.

Express growth was higher over the first half than in the individual second quarter. Delhivery reported 43% year-on-year Express volume growth in H1FY27, compared with 32.1% in Q2FY27, and said October volumes exceeded its initial expectations, while cautioning that it remained early to comment on the rest of Q3FY27.

Adjusted EBITDA rose 48% year on year and 62% quarter on quarter to Rs 123 crore in Q2FY27, from Rs 83 crore in Q2FY26 and Rs 76 crore in Q1FY27. Profit after tax was Rs 41 crore, against a loss of Rs 51 crore in Q2FY26 and profit of Rs 32 crore in Q1FY27; excluding the Ecom Express acquisition impact, the earlier periods' profit after tax was Rs 59 crore and Rs 62 crore, respectively.

What operating actions support Delhivery's utilisation plan?

Delhivery is expanding same-day and next-day delivery coverage, seeking wider adoption of integrated fulfilment services, broadening aggregator and franchise programmes, and adding products in Delhivery One and Delhivery Direct. These Express initiatives are intended to acquire small and medium enterprise, micro-small and medium enterprise, and consumer customers, supporting shipment density and network utilisation.

Supply Chain Services profitability returned to expected levels in Q2FY27 after price revisions and the stabilisation of new operations, following a Q1FY27 dip from fuel and labour inflation and contract-launch costs. Delhivery expects transportation-mix optimisation, agentic transport-management-system freight procurement, greater use of multi-tenant fulfilment centres, and selected automation to support further profitability growth.

Full-truckload freight margins exceeded 5% in Q2FY27 after Delhivery prioritised higher-quality leads and shifted from seasonal fixed contracts towards spot business. Management expects the spot-business share to increase in coming quarters and said agentic workflows for client servicing, quotations and vendor calling are producing operational efficiencies.

What should readers watch on the path to FY27 margin targets?

Delhivery's margin plan relies on pricing and utilisation while capital expenditure remains within its stated trajectory. Capital expenditure was 4.8% of revenue in H1FY27, compared with 5.1% in H1FY26 and 4.7% in FY26, with additions focused mainly on automation and line-haul fleet expansion; management remains guided towards 4.5% of revenue.

Net working capital fell to five days at Q2FY27 from 11 days at March 2026 and 17 days at September 2025, primarily through lower receivable days, tighter credit controls, billing automation and faster claims resolution. Delhivery said seasonal or business-mix factors could reverse some compression, although management expects most of the improvement to be sustainable.

New initiatives received Rs 32 crore of investment in Q1FY27 and Rs 35 crore in Q2FY27, within a FY27 capital-outlay envelope of Rs 130 crore to Rs 160 crore. Delhivery Local was live in eight cities with an annualised revenue run rate of about Rs 200 crore, while Delhivery International reached about Rs 150 crore after 57% quarter-on-quarter growth and achieved service EBITDA profitability.

Conclusion

Delhivery's FY27 exit outlook indicates that management expects its Express and PTL network economics to improve as price revisions and utilisation increase. Q2FY27 showed higher realisations alongside 32.1% Express volume growth, 14.2% PTL volume growth, and a consolidated adjusted EBITDA margin increase to 4.0% from 2.6% in Q1FY27.

The next disclosed milestones are margin progression through Q3FY27 and the expected PTL peak in Q4FY27. Readers should watch whether price revisions continue to offset fuel and labour costs, whether Express volume momentum extends beyond October, and whether capital expenditure moves towards management's 4.5%-of-revenue trajectory.