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Delhivery FY26: A billion parcels, improving ROIC, and free cash flow turns positive

Delhivery closed FY26 with a mix of scale, margin expansion, and tighter capital discipline. Revenue from services rose to INR 10,486 crore for the year, while EBITDA increased to INR 764 crore, taking the EBITDA margin to 7.3%. The company also reported profit after tax (pre-exceptional items) of INR 347 crore for FY26. The milestone that mattered most in the narrative, however, was cash. Delhivery reported free cash flow (FCF) of INR 89 crore in FY26, compared with negative FCF in FY24 and FY25.

The operating momentum was visible in the March quarter as well. Q4FY26 revenue from services was INR 2,848 crore, up 30% year-on-year, with EBITDA of INR 231 crore (8.1% margin). Management framed FY26 as a bellwether year, not only because of the Ecom Express acquisition and ongoing integration, but because the core Transport business (Express plus PTL) began to show the kind of returns the company has long argued a scaled, integrated logistics network can produce.

Transport remains the engine: Express scale and PTL momentum

Transport (Express plus PTL) continued to drive both growth and profitability. In Q4FY26, Transport revenue rose 38.4% YoY to INR 2,453 crore. Within that, express parcel volumes surged to 306 million shipments, up 72.5% YoY, and express parcel revenue increased 45.9% YoY to INR 1,832 crore. PTL sustained a steadier growth profile: tonnage rose 19.9% YoY to 549 thousand MT and PTL revenue increased 20.1% YoY to INR 622 crore.

The quarter also showed operating leverage. Transport adjusted EBITDA improved to INR 194 crore in Q4FY26, translating into a 7.9% margin, compared with 4.5% in Q4FY25.

On a full-year basis, the scale was larger. FY26 Transport revenue came in at INR 8,939 crore, up 24% YoY, supported by express shipments of 1,054 million (up 40.2%) and PTL tonnage of 1,991 thousand MT (up 17.4%). Express parcel revenue was INR 6,685 crore for FY26 and PTL freight revenue was INR 2,254 crore.

Transport adjusted EBITDA expanded to INR 561 crore in FY26 (6.3% margin) from INR 264 crore in FY25 (3.7% margin). Management positioned this improvement as the payoff from service quality, network utilisation, and structural cost advantages.

Supply Chain Services: profitability improves as revenue shrinks

Supply Chain Services (SCS) was positioned as being at an inflection point. The company reported that SCS service EBITDA increased to INR 79 crore in FY26, described as four times FY25 levels. The SCS highlights slide also indicated a pipeline of about INR 1,800 crore of annual business potential under active discussions.

But the turnaround came with a notable trade-off. SCS revenue declined from INR 907 crore in FY25 to INR 729 crore in FY26. Management on the call attributed the improvement to sharper client selection and better pricing accuracy as integrations mature. Management also stated that SCS projects are taken only if they meet internal hurdle rates, with the understanding that margins can fluctuate when capacity is opened ahead of utilisation.

For Q4FY26, SCS revenue was INR 185 crore and service EBITDA was INR 20 crore in the SCS highlights, while the segmental bridge in the profitability table showed adjusted EBITDA around breakeven for the full year.

Financial summary

Note: The company also presented adjusted EBITDA that excludes Ecom Express integration costs and certain accounting items. Integration cost for FY26 was disclosed as INR 148 crore.

ROIC improves as capital intensity declines

Delhivery used FY26 to underline capital efficiency as a strategic lever. Net working capital days reduced sharply to 11 by March 2026, down from 38 in March 2023. Receivable days declined to 44 in March 2026 from 77 in March 2023. Alongside this, capex intensity reduced to 4.7% of revenue in FY26, compared with 7.8% in FY23.

This fed into reported returns in Transport. The company calculated FY26 Transport (Express plus PTL) tangible invested capital at INR 1,925 crore, with adjusted EBIT of INR 308 crore, implying a pre-tax ROIC of 16.0% versus 5.2% in FY25.

Management commentary added two forward-looking markers. First, management reiterated an internal aim to move capex intensity toward about 4% over time. Second, the CFO stated that in a steady state, Transport ROIC can reach 25% plus, driven mainly by margin expansion (including PTL margin trajectory and corporate overhead leverage), with incremental help from lower capital intensity.

Cash flow turns positive, despite integration costs

The cashflow slide highlighted how Delhivery reached FCF positivity. Net cash from operating activities was INR 911 crore in FY26. Capex cash outflow was INR 405 crore and lease liability payments were INR 417 crore. After these, the company reported FCF of INR 89 crore.

The year also included significant investing cash flows, notably INR 1,288 crore of net cash used in M&A. The company clarified that FCF excludes the impact of Ecom Express related integration costs, and integration cost amounts were disclosed separately across quarters.

Liquidity remained a key comfort point in the disclosures. Cash and cash equivalents were reported at INR 4,555 crore as of March 2026.

Technology, automation, and new initiatives: investing while the core funds growth

Delhivery’s messaging leaned heavily into technology and engineering as a compounding advantage. The presentation described an integrated AI layer across operations, from order manifestation to post-delivery dispute resolution. It referenced internal systems such as the Naksha LLM Suite, multimodal deployments across voice, vision, location and transactions, and automation pipelines (SOP2Code and Spec2Code) intended to speed software deployment.

On the engineering side, the company highlighted autonomous mobile robots in facilities, pilots for 3D sorting systems, automated storage and retrieval systems, drone delivery tests, and trucking form factors such as road trains.

In the press release, Delhivery listed several Q4 initiatives: an AI agent-powered autonomous transport management system for freight procurement and execution, launches of Delhivery International economy air-parcel services to the UK, Canada and Australia, and Delhivery One SmartAssist to automate Level 1 customer support within the Delhivery One platform. It also cited an NVIDIA partnership to develop an India-focused AI-native digital mapping platform, and expansion of Delhivery Local to Jaipur.

From a financial reporting perspective, new initiatives are still in investment mode. The segmental table showed new initiatives revenue of INR 47 crore in FY26, with adjusted EBITDA of negative INR 76 crore.

What management emphasised for FY27

The concall discussion was unusually explicit on a few forward-looking points. Management expects e-commerce growth in India to be around 15% to 20% in the medium term. Management also guided to investment for new initiatives of about INR 130 to 160 crore in FY27.

On competitive dynamics, management argued that the market structure in express logistics has become more stable after a period of aggressive pricing. They also reiterated that first-party logistics networks typically have higher costs than third-party networks once fully loaded, and suggested that over time this supports gradual volume shifts toward third-party providers.

Fuel costs were discussed as well, with management indicating that PTL has a more direct diesel price pass-through mechanism, while express is less sensitive but still supported by diesel price hike clauses and airline surcharge pass-throughs where relevant.

Bottom line

FY26 marked a meaningful step-up in Delhivery’s financial profile. Scale remained strong, but the more important change was the combination of improved profitability and declining capital intensity. Transport ROIC at 16% and FCF turning positive provide a stronger foundation to fund new verticals without stressing the balance sheet.

The next phase depends on whether Delhivery can sustain margin expansion in Transport, restart SCS growth without giving back the profitability gains, and show that the investments in new initiatives can become commercially meaningful over time. The company ends FY26 with a large cash buffer, improving returns, and clear operational momentum, which is the kind of setup logistics investors typically wait for.