While some e-tailers may go through ups and downs based on their respective funding situation, the broad arc of ecommerce remains positive, Barua said after an earnings call with analysts on Saturday.
“It is a growing category. We continue to see new categories coming into the market,” he said, explaining his outlook for the industry.
Barua said last year had been slower than expected, partly because some of the growth was pulled forward during the Covid-19 period, but “I don’t think that fundamentally alters the path for ecommerce in the country.”
Barua, who recently joined food delivery app Swiggy’s board as an independent director, was responding to queries after the firm declared its December-quarter results on Friday.
Also read | Delhivery Q3 revenue falls 8% to Rs 1,823 crore
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The ecommerce focussed logistics player reported a drop of 8% in revenue year on year to Rs 1,823 crore in the third quarter, while losses jumped 54% to Rs 195 crore from a loss of Rs 126 crore in the corresponding period last year.The fall in revenue was largely due to the festive season sale starting early in 2022 leading to a surge in volumes towards the end of the previous quarter for ecommerce companies.
Sequentially, overall shipments and revenue increased.
Revenue from its express parcel services, its core ecommerce delivery business, grew 7% quarter on quarter to Rs 1,200 crore in the third quarter.
Delhivery’s forecast for the overall ecommerce industry is significant as it is the largest third-party ecommerce focussed delivery player in India.
While Flipkart and Amazon move the majority of their shipments through in-house logistics units, they also work with companies like Delhivery.
“We continue to see new buyers coming into the market, and that’s not just in ecommerce alone. You see this across all consumer internet businesses,” Barua said. “…if you look at the new participants in the ecommerce marketplace, I think you’ll find that they are not necessarily affected by funding situations in the private markets. You know the new entrants in the ecommerce space as an example, including the likes of Unilever, which are also entering with direct-to-consumer brands.”
Delhivery’s shares fell below its issue price of Rs 487 last October after the company forecast muted growth in shipments.
“We saw growth in ecommerce volumes that have persisted so far in January and February and similarly in the partial truck load business. Growth that set us up well for quarter four, and beyond,” Barua said.
Growth, margins
The company is aiming to continue delivering on growth as well as improve margins in the coming quarters.
“We’ve seen adjusted Ebitda margins improve from minus 7% in quarter 2 to minus 3.7% in quarter 3 and we delivered about 170 million shipments, which is about 5.6% growth quarter and quarter in our e-commerce express delivery business…we continue to have a leading market share as an independent third-party logistics player in this space,” he said.
Adjusted Ebitda loss narrowed by 47% to Rs 67 crore in the December quarter from a loss of Rs 125 crore in the September quarter.
“Improved capacity utilisation in the network, ongoing cost optimisation measures and continued focus on revenue quality and margin improvements across customer segments also contributed to improvement in Adjusted Ebitda,” the company said on Friday.
“We have had a good end to the year and this momentum has carried into 2023. We are confident of continued improvement in our transportation business, especially PTL, and overall profitability metrics,” Barua, who is also its managing director, said in its earnings note on Friday.
Shopee impact?
Barua also said Singapore ecommerce firm Shopee’s exit will not have any impact on the company’s final quarter results.
“Shopee has ceased to exist in the Indian market, and so they will have zero impact on our final quarter (numbers) because they’re not there. I think, when you adjust for Shopee volumes from last year’s Q4 versus this year’s Q4, you will see growth in our volumes year on year,” he said.
Shopee, which was directly competing with low-cost product selling ecommerce firms like Meesho and others, abruptly exited the country in March last year as part of a major reorganisation at the e-tailer’s parent firm Sea group.
Shopee was working closely with the likes of Delhivery, Ecom Express and other third-party logistics firms.
Delhivery shares closed marginally lower at Rs 315.75 apiece on the BSE Friday. The results were announced after market hours.
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