DELHIVERY – One stop solution for shipping and parcel delivery

SaaS earnings, if any, sounds lucrative. However, relying too much on this in the near or mid term might lead to disappointment as it will be miniscule when compared to the revenue from the core business.

What I liked the most was their thinking in terms of creating a software driven scalable, reliable logistics ecosystem whose efficiency is incrementally improved and gains are passed back to the customer to improve the capacity utlization of the network.

In the first look, business profitability looks very bad. However, operating cash flow indicates that cash burn is almost nil when compared to the balance sheet liquidity [5000 Cr. cash]. I am still pondering how they will contain their major expenses to improve the unit economics to realize the aspirational GPM and OPM.

I have sent the below questions to the IR team and would update further in case they revert.

• Your communications in public records make me understand that business can have a combined Gross Margins of 30% [particularly Express and PTL, which carry major weight as of now]. If Yes, what’s your aspirational steady state cost structure w.r.t revenue for the below major expense items and what are the levers to achieve those margins for each of these expenses?

  • Line Haul
  • Contractual Manpower
  • Vehicle Rental

• I see a lot of enthusiasm in your communication around Technology as the key to transforming the logistics industry. You have a dedicated team of ~500 for this mandate. What do you think about SaaS based solutions [products or Support] becoming a major source of revenue for the company?