Good evening, everyone. Thank you for joining us this Friday evening. Dhruv and Ambit team, thank you for hosting us tonight, today evening. As usual, quick summary of the quarter, then we'll jump straight to Q&A. Broad summary is it's been a very satisfactory quarter. As you're aware, quarter one was a slightly challenging quarter with the sort of volatile macro environment. But quarter two has gone more or less to plan. We've had a record quarter in terms of volumes, revenues, and overall business profitability. Our Express Parcel business delivered 325 million shipments in Q2 FY 2027, so we're up about 32% YoY. The PTL business delivered 545,000 metric tons of freight, up about 14.2% YoY. Overall revenue from services for the company crossed INR 3,000 crore for the first time at INR 3,066 crore for Q2 FY 2027, which is up 20% YoY.
Adjusted EBITDA came in at INR 123 crore, or 4% of revenues, with PAT of INR 41 crore. The company also continues to be extremely well capitalized with INR 4,676 crore of cash on the balance sheet. Many of the improvements that we had been driving over several quarters, which is in terms of managing capital intensity, improving net working capital position of the business, and also some of our sustained investments in new businesses and frontier areas in AI engineering and technology are also beginning to play out. We've released most of this information as part of our shareholders letter, which is now publicly available. With that, I'll pause here. Our presentation is also up, but happy to take questions as they come up. Dhruv, over to you.
Thanks, Sahil. As a reminder, anyone who wishes to ask a question may use the raise hand feature, and we'll put you on. The first question is from Vijit Jain. Vijit, please go ahead.
Hey, Vijit.
Hi. Can you hear me?
Yes.
Yes, please go ahead.
Yeah, sorry. I was just congratulating you, but my question is on Express Parcel. You've said before that growth in FY 2027 would be in that 20%-30% range, probably mid, even upper end of that. Sitting where you are right now, just wanted to know, are you closer to that upper end still? That's my first question, and I then wanted to follow up on a couple of things.
Vijit, why don't you go through with all your questions, and I'll-
Sure
keep them all at the same time.
Yeah, sure. My second question was, your investments that you've mentioned here, shifting focus on more automation, ASRS, et cetera. When you compare all of these new investment areas in core business, right, to things like 40 ft trucks and automated sorters that you've done before, those obviously paid off in pretty significant ways. How does this compare in terms of potential scale? Similarly on the revenue side, I wanted to understand, if I look at some of these new initiatives, same day, next day expansion, Delhivery Direct, and financial services, so on, how would you scale them in terms of opportunity that you see in each of these? Those were my questions. Thank you.
Sure. Thanks, Vijit. Let me go through these as quickly as I can. Volumes, as you can see, have been growing over 30% YoY. As things stand, the month of October has also been a pretty good month for us, and we're ahead of where we actually expected to be as of this month. What's surprising, I had spoken about this in Q1, is that despite a fairly volatile macro environment, volumes have broadly held up. As things stand, I don't really see any reason for us to revise our estimate of growth. In fact, we are at the moment beyond the upper end of the 20%- 30% that we had guided at the start of the year. It looks like we should easily be The worst case sort of should be that we would be at the upper end of that.
I think it's going to turn out to be a reasonable year from a volume standpoint. Again, that said, frankly, U.S. midterm elections are on Tuesday, so let's see how things go. To your second question, let me answer your third question first and then come to the second one, which was on automation, where that's a slightly more nuanced question. On the revenue side, see, same day, next day delivery, I've spoken about this in the past. Our volumes in this segment are actually pretty significant. The only reason we don't disclose or sort of talk about same day, next day beyond a certain point is because when you compare the same day, next day volumes to the overall massive scale that the business has, it doesn't look as large.
But suffice to say, our same day, next day business is easily north of a couple of hundred crore in overall revenues. What we do also is not just the pure transportation of same day, next day services. It's also sort of, in some senses, a part of our Supply Chain Services business, because we also provide integrated fulfillment solutions to vertical brands. So it's a pretty meaningful business overall, but let me put it this way. Were we to split out this business, it would probably look like a INR 300 crore, INR 400 crore, INR 500 crore business, all things put together. But we don't disclose it largely because it's, sort of one is it's fundamentally running on the same network and B, it's sort of a part of a much larger Express Parcel network. We will continue to invest in building out more of these fulfillment centers.
We have several across all of maybe the top 15 major cities. So continuing to expand that footprint, continuing to grow the client base over there is obviously a priority. Coming to Delhivery Direct, there are two parts to this business. One is Delhivery Local, which is our in-city, on-demand commercial vehicle renting service. That has actually been a pretty big positive surprise. Our aim was to really get to maybe a sort of INR 240 crore-INR 250 crore ARR by exit of this financial year. As things stand, we've already crossed INR 200 crore, and are growing faster than we originally expected. We are also ahead in terms of contribution margin compared to our original expectations. Our original expectations was that CM breakeven would happen sort of earliest, maybe, sort of early/middle part of next financial year.
But as things stand, it's looking more like CM breakeven could happen as early as Q4 of this financial year. So, I'm hopeful. We're in eight cities now. I'm hopeful if things continue that we should cross even potentially a INR 270-280 crore sort of run rate on this. How large could this business be? As I've mentioned before, it's very hard to say. The addressable market for in-city shipping using LCVs is very, very large. There are players in this space already. Porter's obviously a good example of a great company in this space. So, it does feel like the headroom for growth here is massive. We also do intercity Delhivery Direct, which is also now, and it's also focused on sort of non-e-commerce, but Express Parcel shippers. This business also is now slowly becoming quite material. It's accessed, obviously, again, through the Delhivery Direct application.
For SMEs, obviously, they use the Delhivery One application. These businesses also today are material businesses. Delhivery Direct for consumers today, for example, is probably running at close to nearly INR 100 crore in maybe about 15 months of focused effort on the business. The international business also has picked up the Saver business that we had launched. We are today hitting probably close to a INR 140 crore sort of ARR in this business. It's actually grown 55% Q-on-Q between Q1 2027 and Q2 2027, and has also broken even at a service EBITDA level. So, both of these things have been pretty big positive surprises. Addressable market, again, for economy international shipping is pretty large. Our estimation is, over the next three or four-year period, the economy plus express shipping revenues for Delhivery could end up being a sort of low four-digit crore.
This could be a INR 900 crore–INR 1,000 crore kind of opportunity for us, and a profitable one at that. That leaves us with financial services. On financial services, I think it is better for me to comment once we have all our ducks in a row. A lot of this year has been spent on getting ourselves set up regulatorily, to be able to expand this business. We are obviously in the business of eventually being able to extend through partners loans to fleet owners, who can then attach their vehicles into the Delhivery network. Then obviously, to launch that for electric vehicles, launch it for LCVs as well, and then also offer other financial products like insurance. Monetization has begun, but at this stage, it is at a very, very, very early stage. So, be better positioned for us to comment end of this financial year.
Coming to your second question, which was on automation. See, the TTs and the sorters, I do want to point one thing out. With the benefit of hindsight, now, it feels like a lot of the market is looking at our investments in TTs and sorters and saying, "Oh, yeah, these are now slam dunk investments that paid off." But it would be remiss of me to not point out that at the time that we began bringing TTs into India, and similarly, nearly 12 years ago when we bought out practically all of India's sorter capacity, the collective reaction really was that this was an investment that didn't make sense, and there was a lot of questioning about whether it would pay off at all.
Our view on automation fundamentally now is that it is an existential question, because the realities of the labor environment in India has been steadily becoming more volatile and more challenging. One of the reasons, obviously, is labor availability has been challenging. Seasonal fluctuations in labor availability are pretty large. The second issue is regulation for the workforce has changed quite a lot, and it is quite volatile overall. Minimum wages keep getting revised. There is a whole bunch of compliance that keeps changing, and staying abreast of that obviously is challenging. The third reality is that the impact, it is something that is not spoken about much, but the impact of climate on labor availability and workforce productivity is pretty significant.
When we do the math, our view is that Indian labor, when adjusted for productivity, is increasingly becoming uncompetitive, and therefore, as a consequence, the investment in automation is beginning to look better and better and better. The other advantage, of course, is that the price of automation is sort of coming down, and for as people who have invested in this space for a very long period of time, we are also 40% shareholders in Falcon Autotech. We sort of understand how the cost curve for automation works, and we do believe we are at that cusp in terms of new robotic systems that we otherwise would simply have been unable to deploy maybe three or four years ago.
We have spoken about both self-developed autonomously guided vehicles for in-facility movements, but we've also begun to pilot and experiment with a number of other interesting robotic systems across our mid-mile operations. My sense is that the paybacks will easily match the payback periods that we're seeing for TTs, that we've seen in the past for TTs and for sorter systems. On the software front, because that's also been one area where investments have been, we've spoken about this in the last four quarters, we have been spending on AI initiatives within the company. Four quarters back, a lot of this was really focused around the software development life cycle. It really was about how do we make our own technology teams more productive.
Today, with four quarters of sort of work behind us, we are beginning to finally sort of see fairly material improvements in service and cost outcomes through our AI initiatives. Whether it's a combination of reducing claims, which is one of the sort of more obvious use cases, or one of the less obvious ones, but that has worked out, is improving sales productivity, auto-generating bids. The other one, of course, has been delivery maps, which over the last two quarters, the sophistication it has reached is already saving us $1 million a year, compared to using sort of Google APIs. I think these initiatives are going to pay off even faster. When you look at our overall investments in engineering and technology, I think, one, these are existential and essential for any company that's serious about scaling.
I think they will pay off exactly as fast, if not faster than the TTs and the sorters.
Got it. Thank you so much, Sahil, for that answer. Just wanted to check, one question that comes up is, you guys have what are known as unbilled receivables, right? I know those numbers have been coming off. Your working capital improvement has been pretty sharp. In general, because you mentioned something along the lines of that in the letter, do you see more meaningful improvement there from these AI initiatives as well? Ability to kind of bring your unbilled receivables and the like to kind of zero?
Vijit, I think-
That was my last question. Yeah.
Automation will certainly help in further improving our collection cycle because faster billing, more accurate billing, and faster claim resolution. AI-driven automation will help in all of these things, and hence our receivables can further improve. But unbilled will not have anything to do with it. Unbilled is more of an accounting concept where a shipment which has not completed its life cycle in the network, a partial revenue has to be accrued as per accounting rules, and hence it shows up in unbilled. It is more of an accounting construct, I would say, and wouldn't have anything to do with AI.
Got it.
But in general, yeah, it will help us further compress our net working capital cycle.
Got it. Thank you. Those were my questions.
Thanks.
Thanks, Vijit. The next question is from Gaurav Rateria. Gaurav, please go ahead.
Hi. Hope I'm audible.
Yes, you are.
Yeah. Hi. Congrats, Sahil, on good execution on margins. I have two or three questions. The first, I see a lot of focus in the shareholders letter around visibility to get to the margins that we desire to in different matured business segments that we have. I'm just curious that, is it kind of hurting our market share aspirations in the core segments like Express? Because I see that the volume growth turned out to be slightly muted in the current quarters. That's question number one. Question number two is, I understand the cost that impacted us, and then we are catching up on those, and margins are improving, and you gave a visibility of two H.
But let's say on a full-year basis, in a year where we have seen excellent volume growth in the industry and for us as well, we have gained market share, is it fair to say that we should still be, on a full-year basis, be expanding margins compared to last year? The last question is that you did outlay couple of initiatives in the core Express segment to sustain the growth through the rest of FY 2027 and beyond. Is it fair to say some of these will fructify and help on your volume growth aspiration, mostly coming in the numbers in FY 2028? Yeah, these are the three questions I have. Thank you.
Yeah, sure. Let me go again one by one. Your first question was around Express and whether the priority for us has been margins versus growth. One of the things that we've spoken about in the past is that, yes, of course, our sensitivity to profitability is significant because our belief is, and you've seen this in the past, I've spoken about it, we made an acquisition of Ecom Express because we do believe that ultimately profitability is more important. Therefore, the selection of volumes that enter your network is actually pretty important. I think I've spoken about this publicly in the past, that the way our Express network is designed is fundamentally first to protect the volumes and the service quality of everybody who's not a major marketplace. Only after that do we start looking at the capacities that we have and begin to allocate them.
And within that, our demand shaping tools are today very, very sophisticated, and they have the ability to both margin manage the volumes that enter our network, but also service manage the volumes that enter our network, which means that we do not deem all volumes from all kinds of customers to be equal. To give you one example, if we see a consignment, it does not have to be from any specific client. It could be an individual shipper, it could be the largest marketplace in the country, or anyone in between. If we see that this is a shipment which is unlikely to be delivered or for which we believe that we would not be able to provide a reliable service outcome, our systems will ultimately prevent manifestation of such products within the network.
One of the things that we see is that during the peak periods or in the buildup to the peak periods, obviously some of these controls tend to be sort of a little more loose or a little more fluid at shipper end. So it is important for us as a carrier to be more careful at these moments. So that is, of course, a choice that we make. But just to be clear, it is not a choice that we make purely basis margin. It is also something that is service optimized.
The other thing that we do not do, obviously, is in these peak periods, in the absence of demand shaping, which we used to have maybe three or four years ago, what would happen is that if we allowed volumes to come into our network sort of in a fairly random and unfettered fashion, all clients would suffer as a consequence of volume surges from specific clients in specific areas, and our PTL network would also suffer as a consequence of the same thing.
So our systems are designed to first and foremost safeguard reliability. They are also designed to safeguard customer outcomes, and then they are there to safeguard margins as well. So yes, to a certain extent, we do demand manage because we do not believe that all volumes are the same. The other thing is to remember is we do not do as much, for example, returns in this period.
Our absolute volumes of returns, just to be clear, reverse pickups is very substantial. We are, in absolute volume terms, probably one of the largest players, if not the largest player in this space, outside of the self-logistics arms, obviously. But that said, our relative share with specific kinds of customers may not be as high. And the simple reason is that typically when you start admitting bad quality returns into your network, you will start seeing higher claims. I think you can see that our claims ratios, for example, are a fraction of those of the rest of the industry. Claims also have a nasty tendency of resulting in revenue provisions or in loss provisions, which you have to take in quarters down the line. And we have learned through a lot of experience that that is not something that we want to do.
As a public company, we certainly don't want to do that. We do stay away from that kind of volume. Your second question was in terms of margin expansion overall. I think the absolute margins across the transportation network will broadly remain constant. At least that's our outlook for the moment compared to where we were last year. We shouldn't see a degradation of margins in the transportation network. That itself, I think, is pretty decent because we had a rocky start to Q1, obviously, with the inflation that we had with fuel. That said, we've got a number of productivity measures which are still underway. If those come through, we have certain, for example, we have certain initiatives which are underway around unitizing our loads and so on.
The initial sort of results from those experiments have been pretty solid, going towards the later end of Q2 and the early part of Q3 now. As that continues and as PTL volumes grow further, that may lead to expansion of volumes, or expansion of margins. Rest assured, I think overall transportation margins will broadly be in the range that we said they would be in. Then, of course, on SCS, you can see margins are sort of normative now that the overall sort of business is stabilized. I don't know if Vivek has a point of view on this. I'll invite him to also find.
Gaurav, hi. Vivek here. As Sahil laid out, the overall transportation margins, you should see an improvement. PTL has been improving YoY. We'll continue that journey. Express, it should be at least equal to FY 2026 levels. Let me put it that way. We will provide more color as the year progresses because, as you know, third quarter is the key quarter for Express, and what happens in third quarter has a significant impact on the full year profitability.
Got it. Thank you. All the best.
Thanks, Gaurav. The next question is from Abhishek Banerjee. Abhishek, you may go ahead.
Hi. Just the first question, Sahil. Look, we are obviously talking consolidated margins, but if we look at service level, right, you would be nearing the higher end of the band in Express Parcel at least, right?
Sorry, do you mean the service Adjusted EBITDA for the express business, the typical range that we provide, which is the 16%-18% range?
Yes.
Yeah. So Q3-
Yes
obviously is a quarter in which the margins expand quite a lot, and that will continue, yes. Sorry, was that your question?
Yes, exactly. One more clarification. Basically, we wanted to understand how your D2C market share has kind of moved in the last year, right? Also, if you could give some sense of the market share move of the overall 3PL Express Parcel market, how that has moved.
See, on the D2C business, when we look at it across all sizes of customers, which go from D2C, SME, micro-SME, who ship across our various surfaces, whether they are directly integrated with us or they're coming through Delhivery One or through Delhivery Direct. If we look at our overall growth, we are pretty confident that we're easily the market leader in that, and our market share in the worst possible case has remained constant, but in all likelihood, our market share has probably grown in that segment over the year. The reason I say probably grown is because the overall volumes of D2C, it really depends on what you classify as a D2C brand and what you don't classify as a D2C brand. Somebody will say Nykaa is a D2C company, somebody will say it's not a D2C company, it's a vertical e-commerce player and so on.
But suffice to say, as we look at our volumes, our volume growth across that entire segment has remained as robust as it's always been. No sort of major change at all. Sorry, what was your second part of your question as well, right?
That was on the Express Parcel side, on the entire 3PL market.
On the entire 3PL market, I think if you look at forward logistics, now the entire 3PL market itself, there is a combination of things. There is the forward logistics piece, there is the reverse logistics piece. I am deliberately sort of leaving out certain things from this, which is, for example, models that Delhivery does not do, which is, where we will pick up from a Flipkart DC and do only the last mile, because we consider that to practically be contract logistics. But when you look at the forward logistics space overall and we look at our volumes on forward logistics, our market share is intact. On reverse logistics, as I mentioned, in the peak period, our overall share of the reverse logistics market does decline a little bit.
That is largely because we do not do all kinds of reverse logistics for reasons I have just pointed out, which are to do with quality and to do with potential claims arising out of doing low-quality returns. On the sort of contract logistics piece, it is a market that Delhivery does not play in, and it sort of, in some senses, almost double-counting the volume, so we do not consider that to be part of the industry.
Got it. Just one last question, which is on the intracity rapid logistics piece. My understanding is you have kind of dialed down on that, right? You did a pilot, but you have kind of dialed down. Would you provide us some color why you made that choice?
We haven't dialed down. We merely realized that the right format is actually for it to be integrated into larger fulfillment centers, which is something that we always did. That's an extremely material business for us already, by the way. The overall integrated fulfillment for e-commerce is today a significant portion of our SCS business overall. Like I mentioned, the SDD, NDD volume that we do, we don't split it out because it's, relatively speaking, on a very massive base, not as material, but it is still a large enough business. So, there's absolutely no change in our desire to provide SDD, NDD services, whether it is two-hour delivery, four-hour, eight-hour, or 12-hour. The only advantage that we found to the larger fulfillment centers that we set up is that the scale is significantly larger.
Our transportation, sortation operations, and our in-city distribution models are much better set up from the fulfillment centers that we already have, as opposed to in-city fulfillment. So, there's no change in strategy, just to be very clear.
Understood. Thanks. Those were all my questions.
Thanks, Abhishek. The next question is from Sachin Salgaonkar. Sachin, you can go ahead with your question, please.
Thanks, Dhruv. Good day, management. Three sets of questions. Sahil, again, following up on the Adjusted EBITDA margin, and I am hearing both the comments. Your shareholder letter did mention about Express Parcel margins, for example, in the range of, let's say, 16%-18%. There was a comment earlier which mentioned about it will not be lower than, let's say, last year, which is roughly around 17%. Suffice to say that we should not see a sort of a 16%, an ideal range in terms of margin should be 17%-18%, or would love to understand the scenario where we see margins actually declining on a YoY basis. That is question number one. Question number two, wanted to understand some comments on yields in this Q3 on Express Parcel, because typically it is a quarter where we actually see heavy goods being transported, and hence there is a seasonal improvement in yields.
Hey, Sachin, I am sorry. I am not sure if it will-
Sachin, I am sorry. I am not sure if it will-
able to reach me, but I lost a little bit of what you were saying.
Okay. Should I repeat my first question also?
I got your first question. It's your second question I didn't. You were saying something about yields.
Yeah. Sorry. I was saying that, I mean, 3Q is a seasonally stronger quarter from a yields point of view, because of the heavy festive season goods being transported. Would love to get some color in terms of how yields are in the month of October and what we should expect in terms of yields. Third question is generally on the growth for next year. Obviously, this year we had some tailwinds in the industry, which led to a sort of a stronger growth in terms of shipments in Express, but now we are actually on a higher base. Directionally, as we go into next year, should we see a sort of a base effect kicking and hence growth on a YoY basis would sort of taper down to the historical levels?
Lastly, I didn't see any mention on the rapid commerce in your shareholder letter, so just wanted to understand where we are from a rapid commerce business point of view. Thank you.
Sure. On Express, very simply, I think, see, last year we were at almost, whatever, 17%. I think safe to say that fiscal 2027, 17% sounds absolutely where we will end up. I don't immediately, to be honest, Sachin, foresee any sort of disastrous events that could take us off that 17%. That said, like I said, this has been a volatile year, so it's difficult for me to say exactly what will happen. Unless there is sort of a catastrophic, really catastrophic change in fuel prices or something, I really don't foresee why those margins will not persist. The other important thing, like I mentioned, is that PTL margins should expand between fiscal 2026 and 2027, and PTL volumes will also grow, fiscal 2026 versus 2027.
One of the things that does tend to happen is that as PTL volumes go up, the efficiency of the overall network also increases. When the efficiency of the overall network increases, there's a knock-on benefit that Express has. If anything, at the moment, looking at things the way I'm looking at them, there are possibly more upsides to the Express margin than downsides. Not particularly sort of concerned. Overall, aggregated transportation margins will certainly expand. Our estimation is that overall aggregated transportation margins should expand by, call it, 130 basis points, 150 basis points at even conservatively between fiscal 2026 and fiscal 2027. In terms of yields, see, yields have already expanded Q1 to Q2, which also, it's interesting because it's sort of a historical anomaly a little bit.
Generally, yields have not gone up in the Q1, Q2 period as much, or at least not sort of on a regular basis. Part of this obviously is the fact that we've had price revisions which have come into force as costs have inflated. Part is obviously to do with mix. In Q3, yes, our overall heavy volumes are higher, because this is a seasonally high quarter for heavy. That said, there's a lot of Q3 still to play out, so it really depends on what happens through November and December. Broadly speaking, there's no structural change that we see to yields in 3Q versus 2Q or anything of the sort. In terms of next year's growth, I think, look, this year obviously there have been certain tailwinds in terms of industry volumes being higher, and we've also gained share.
I think, I've said this in the past, which is volatile environments are generally good for Delhivery. Looking ahead, if the environment sort of continues to remain volatile or gets more volatile, that's actually a good thing for us. I think there are certain structural advantages that we have, certain structural initiatives that are underway that are differentiated, whether it is our investments in making our facilities, our staff, our vehicles more productive, which give us cost benefits, whether it is the service benefits that are arising out of our investments from a technology standpoint. Those will play out, and our ability to make those play out is significant. So, I think we'll gain share irrespective of what happens to the market next year.
But at the moment, at least, let me put it this way, I don't see any particular reason for our guidance on e-commerce in general growing volume terms somewhere between 15%-20% being very, very off. I'll give you an example. Right now, if you look at October, there was a lot of hue and cry about, "Oh my God, the e-commerce market has not done very well. Sales have not gone very well." But that's largely because in GMV terms, perhaps, the sale has not done as well as some people might have expected. Retailers who were very heavily focused on selling electronics may have not had the best possible sale. But in volume terms, we've been absolutely fine. As I'd mentioned, October, in fact, is sort of slightly ahead of where we expected when we forecast what we thought would happen.
I don't see sort of any structural damage on e-commerce growth. I think 16%-20% sounds perfectly reasonable. Your last question was rapid commerce. I think last year Abhishek also asked the same question. See, on rapid, it's not that we stopped the service. The fundamental service that customers want is fast delivery in the same city. All that we realized is that we don't need to run it through dark stores. So, we began by doing it through dark stores. We began by actually offering that service through a network of whatever. I think at peak, we'd reached maybe some 20, 30 dark stores across three, four cities, and then we realized it just makes more sense for us to take this back into our larger fulfillment network, which allows customers to serve all kinds of demand.
If you're going to build up a pool of inventory, why build up a separate pool of inventory to service a two-hour delivery versus an eight-hour delivery versus a next-day delivery, versus, frankly speaking, even an intercity delivery? So, this whole idea that you need to create different pools of inventory to service different speed doesn't make a lot of sense. It just forces brands to take extra costs. We already had a fulfillment network which is fairly significant, and our e-commerce fulfillment business actually is pretty significant within the SCS business. So, that's all that's happened to rapid. It's basically been folded back into this, and the service continues to persist exactly as it did.
Got it. My last question, when we heard one of the e-commerce companies talk in their conference call, it was about the industry facing supply issues and not demand issues, in the sense higher oil price has impacted manufacturers in terms of making up goods and sort of transporting across. Are you also sensing it across your e-commerce platforms, that kind of an issue, or that could be more like a one-off and not to read too much into that?
I mean, to be perfectly honest, I'm not sure that we see that. There are several reasons, because among other things, it's not that people are just beginning to manufacture to order in a three-month cycle. India has inventories which are also built up. At least so far, we have not seen that that has had an impact, the supply side hasn't had an impact. I think for any individual e-commerce player, really, I'm not sure that I'm best placed to comment. What I can tell you from our volumes is that we haven't seen it. We haven't seen supply-side issues. The question is whether, the right question, and that has been asked, for example, demand for electronics has collapsed. The question is whether there are certain specific sub-segments or verticals within which, again, demand has declined because consumption for those verticals has declined. That's a possibility.
But again, for us, we're a broad-based player, so it doesn't matter. When consumption for one category drops, consumption for another category, in our case, from another set of clients, will go up. We haven't seen it. And like I've said, one of the things that at least we There's a reason why we focus so heavily on volumes outside of the top three, four marketplaces and protect it so carefully, because those segments are, relatively speaking, always a high-growth segment for us. And frankly, if we haven't seen supply issues affecting them, I don't really know. But like I said, I'm not the best person to answer this question.
Got it. Thank you, and all the best.
Thanks, Sachin. The next question is from Krupashankar NJ . Krupashankar, please go ahead with your question.
Yeah. Good evening, and thank you for the opportunity. My first question will be on the price hikes. Just wanted to get a sense, Sahil, when were these price hikes concluded, just to get a sense of when, if any spillover effect will come through in 3Q as well, both for Express Parcel and PTL. My second question is on the shareholders letter, you had mentioned that Delhivery is expanding geographic reach for SDD and NDD. Just wanted to get a sense of what are the new layers of infrastructure added to strengthen this piece. Given that historically we have talked about operating leverage in the overall network, how does this play out in that overall equation, given the fact that it will be fairly shorter than delivery timelines, right? Just wanted to get a sense around that.
Sure. On price hikes, see the immediate sort of price revisions that had to be made in response to inflation and fuel costs, and in some cases, changes to the Labour Code, we started making them about towards the middle end of Q1. We had spoken about this in Q1, that a lot of them would fructify in Q2, and you can sort of see that that has taken place across both the Express Parcel and the PTL businesses. Let me also be very clear.
On the PTL business, a smaller portion of the overall change in yields has been driven by price revisions, which were driven by inflation and underlying costs. A lot of this is also sort of contractual price revisions and changes to the prices of certain value-added services that we have. It's an ongoing process. So, I guess, if your question is when do price hikes conclude?
No, I mean, philosophically, they don't conclude, right? You sort of, you keep going. So, increasingly, as our network has become more reliable, as the value-added services that we provide have become more differentiated, our ability to explain to customers that they should pay us higher value for that is obviously strengthened, and that's reflective. Now, I don't know exactly sort of what the yield for third quarter or fourth quarter will be, how much will it go up by compared to the second quarter and so on, because there are also mix effects that come into play, there are density effects that come into play.
But suffice to say, our objective is always to charge the worth of what our service is in the case of PTL, and of course, in the case of Express Parcel, but with the point of view that our Express Parcel customers should also enjoy the benefit of the lowest possible cost of shipping, which is also, of course, profitable for Delhivery. So, that, of course, will continue. In terms of geographic reach for SDD, NDD, see, when Delhivery talks about increasing the geographic reach of any of our services, that does not come with an underlying assumption that we have to expand infrastructure to provide it. What we have to do to speed up our network is really merely to change the manner in which we do our line haul routing.
In certain cases, when our volume reaches optimal thresholds, it means adding an already efficient vehicle to the existing set of vehicles. There is not going to be any specific expansion of either fulfillment center or transportation infrastructure to service an expansion of geographic reach of SDD, NDD. These are largely our ability to now route more and more into these locations. The one unique advantage that we have is that you need a minimum viable volume to make an additional location eligible for SDD, NDD, or fast delivery. The advantage that Delhivery has over here is that by virtue of our PTL volumes also growing, even distant locations become viable for express if PTL is growing. Once upon a time, the Delhivery network used to be an express-denominated network that carried PTL.
Over a period of time, we have become a network which, in certain situations, is a PTL-denominated network that carries express and that allows us to expand the scope of our express services. So, there is no fundamental increase in infrastructure or fundamental increase in fixed cost that comes out of expanding the SDD, NDD network. It is really, think of it as sort of a variable expansion of the network.
Got it. Last question from my side. If one were to look at the investments towards automation, you did highlight that in the previous conference calls as well, but just wanted to get a sense of when do you expect these corporate expense or corporate overhead expenses to come to that 7% levels, which was guided earlier? Any commentary around that?
Yeah, I think, logically speaking, there is no reason for us to not be able to reduce corporate overheads as a percentage of revenues. I mean, you will already start seeing it happen through Q4 and beyond. But I think that should take place as we get into the next financial year as well. Specifically, whether we will get to 7% in the next year or not really depends on sort of how much we choose to grow certain parts of our business. But I do not see this taking longer than maybe 24 months or so. It is not going to be that complicated for us to do. We had to invest a little bit more from a technology standpoint in this year for reasons pointed out. I mean, we were confronted with a new technology that is fundamentally sort of life-altering.
Expanding our capacities and our capabilities within our teams was essential. I think we have a firm handle on what we need to do at this stage.
Got it. Thank you, and all the best.
Thank you.
Thanks, Krupa. The next question is from Koundinya Nimmagadda. Please go ahead.
Yeah. Hi. Thanks for the opportunity. I have a couple of questions. The first one is on the pricing, most on the Express Parcel side. Now, obviously, this quarter you were able to pass on some of the inflationary headwinds. My question is slightly more long-term. Has there been any work with respect to the contract designs to pass on the fuel costs or any other inflationary headwinds as a part of your customer? I mean, because you obviously have nearly 60,000 odd customers to engage with. Tomorrow, let's say there's another set of price hike in diesel or maybe the wage inflation kicks in again, and rather than a slack-off, it kicks in again. Do you still have to go back to your customers again and negotiate it on a one-on-one basis, or has there been any work on the contract structures per se?
The second question is on the supply chain side of things. I think a couple of quarters back, there was a large pipeline indicated, so just trying to understand where are we on that.
Sure. On the first one, both Express and PTL, slightly different answers. On PTL, I think 96%, 97% of the revenue of PTL is anyway covered by automatic adjustments in the event of inflation in fuel prices or wages, so there's direct coverage. On the Express side, it is not that we go and negotiate with 60,000 customers one by one when there's an inflation in underlying costs. Of course, our contracts carry provisions for this. All our contracts do carry this. They are, of course, pegged at different rates depending on when the contract was signed. So, the index fuel rate may be different, or the index wage rates may be different. From a count standpoint, a vast majority of our customers are automatically covered. As soon as there is an inflation in underlying fuel costs or in underlying wage rates, that will kick in.
Most of these customers anyway transact with us through Delhivery Direct or Delhivery One, and as a consequence, their rate cards reflect that change immediately. In the case of our largest customers, all our contracts do provide for inflation in case of inflation in underlying costs. That said, even though that is there, and of course, those become incumbent within the timeframe that we've set within the contract. When a INR 12,000 crore logistics company is discussing this with a INR 100,000 crore retailer on the other side, both of us sit down and do what's best for both businesses. Now, coming to your question on Supply Chain Services, I think the pipeline remains robust. We continue with the two new businesses that we had started in quarter one, which were a little bit of a drag on margins, have stabilized.
Now that those businesses have stabilized, we expect that we will start expanding some of those. We also have a couple of new initiatives which are planned. Our pipeline converted a little slower than we expected in Q1, and overall, I think sales cycles have gotten pushed out a little bit. That is largely because when costs were inflating so unpredictably, it was getting pretty difficult to establish a clear handle on exactly what our solutions design would be. So, with several customers, we've gone back and forth a little more than we would have under normal circumstances. If you're setting up a fulfilment center for somebody in Bangalore, and you set it up, and one month later, government changes minimum wages, then sort of your solution is knocked out of the water in the first 30 days.
We've just been a little conservative with some of our new starts. That said, our e-commerce starts within Supply Chain Services have actually gained pace. That business is up, I think, probably 50%+ YoY. It's the enterprise side where we've been a little more conservative and decided not to start, or not to push some of our conversations until we have a very, very clear handle on how costs are going to inflate.
Sure. Sorry for hopping a bit on the first part with respect to the fuel price hikes. Obviously, when the first price hikes with respect to diesel happened, there was a quarter lag before it got passed on. So, I'm just trying to understand, if there were a next leg of price hike, will the timing difference still continue, or is it that it may not be as inefficient as it was, or less inefficient when compared to the first quarter impact that we saw? Has there been any change on that front?
It will be less inefficient than it was at the end of the first quarter, for sure. But on a lighter note, I have to ask if you know something that I don't.
No, I mean, looking at the way crude prices are. I mean, just being curious.
Yeah. No, no, I get your question. I wish I had a crystal ball, and I could tell exactly what's going to happen to costs. Your question's a good one, and it's something that we also worry about. Suffice to say, our contracts are revised now to make sure that the lag effect is significantly smaller.
Yeah, because the idea for me is that now it's a consolidated industry. Obviously, you should be able to take what is rightfully yours. So, that's where my question originates from. Anyway, I mean, there are few things one can control.
Yeah. You're absolutely right.
Thank you. All the best.
Thank you. The next question is from Swapnil Potdukhe. Swapnil, please go ahead.
Yeah. Hi. Thanks for the opportunity. My first question is, can you spend some time on explaining your exposure to one of the large horizontal marketplaces today? How has that changed in the recent periods? Given that that marketplace has been growing at a healthy rate, there are indications that they may lower the outsource volumes. In that case scenario, what will be the change in your guidance in terms of volume growth, maybe for next year, if not this year? That's question number one. The second question is with respect to your PTL tonnage growth. I can see that the growth was around 14%, which is lower than the previous two, three quarters' growth. Is there something to say that you have sacrificed some volume growth for protecting the margins or improving the relations?
Any indications as to how should we see that growth going forward? Thanks.
Sure. The second one is actually a very, very short and quick answer, so I'll start with the second question. No, there's no question of sacrificing growth from margins or anything. It's similar to the answer that I gave on the Supply Chain Services piece. A reasonable portion of our growth in any given quarter comes from new business development as well. When costs were inflating unpredictably, one of the things that we didn't want to do was to sign on new customers at rates until we had a very, very firm handle on what was going on with costs. So we essentially focused more heavily on just retaining the clients that we had, increasing volumes with retention clients, and dialed down new business development a little bit.
Outside of which, of course, there were price increases that we were discussing with clients through the quarter, which is why you see this sort of unusual situation where volumes have gone up 14%, but revenues have gone up, I think, 23.2% or thereabouts. So no structural change. There's no reason to believe that YoY volume growth will not return to the 20%+ range. I think we mentioned this in the shareholders letter. Our sales tech is making a difference. Our NBD efforts are now active as of the end of the peak season again, and teams are starting to get more productive with the information that we're able to provide them, obviously through what we're doing on the agentic side with Salesforce. So, no structural change on PTL should be expected at all.
In terms of the large customer that you're speaking about, obviously it's very specific what you're speaking about, but there are multiple large customers that we serve. I think there are two pieces over here. One is in terms of their overall sort of strategy on outsourcing. I've mentioned this in the past, right? Our view is whatever they choose to do at the end of the day, customers in India are always going to be service-sensitive beyond a point, right? There's nobody in the country who says, "I'm okay with slow shipping or late shipping or poor shipping outcome if I'm going to get INR 5 off on my shipping." That is really the market where Delhivery has a very differentiated value proposition.
If one of our large customers chooses to redirect volumes to some extent towards their internal logistics, our sense is they will do it from the weakest player that they happen to work with, and they work with multiple players. Now, we are not that weakest player, far from it. So we actually anticipate that there shouldn't be any very fundamental change to our volumes, right? It's no different in some senses. This question is something that we've been asked since we went public in 2022. We've kind of maintained the same answer throughout. Any individual customer in any given quarter, obviously depending on sort of what their objectives are, changes strategy sometimes for that quarter. But on a consistent basis, our market share has gone up significantly. We are the market leader in this space. We have a differentiated value proposition.
We have a service standard which bears up to scrutiny. We feel pretty confident that we should be able to maintain our position in the market. Not particularly concerned overall. In terms of concentration risk with this specific customer, we mentioned it in the past. I think we don't believe that we have a material concentration risk with any large marketplace customer for two reasons. One is obviously that we very carefully manage the volumes that we get within our network. Our priority always is to first make sure that we do protect all the volumes that we get which are non-marketplace, because for a lot of these customers, the reality is that they don't have too many options outside of Delhivery. We have a primary responsibility there, and then we service the marketplaces.
That gives us a sort of very, very big foundational set of volumes. The second, obviously, is we've expanded beyond e-commerce within Express as well. There is a large Express market which is not just e-commerce, and we have a leading position in some sub-segments of that as well. As we grow that, again, we have a very large foundation. I get where your question is going, but we've said this in the past, we are not an e-commerce-only shipper. We are a very large carrier of all kinds of products. E-commerce happens to be one of the things that we carry, and so our concentration is not material. The second is that we also, if you look at the overall group revenues, increasingly our revenues are also coming from non-e-commerce businesses.
Whether it is PTL, which obviously has grown 23% year-on-year in revenues, whether it is Delhivery Direct, whether it is Delhivery International, whether it is Supply Chain Services, FTL, et cetera. We have a wide range of revenues, and so no individual customer in that sense is as large. Obviously, if you're an e-commerce-focused shipping company at this point in time, the reality is that the three marketplaces are going to form probably, I don't know, 85% of your volumes or something like that. That's nowhere near the case for Delhivery, and certainly not in revenue terms. Not a very material concentration risk, and concentration has not materially changed YoY for us either.
Just to extend that question a bit, [inaudible], how much non-e-commerce market you think you're yet to reach or monetize in a substantial way, given that you're basically suggesting that the size of the market will ensure that you will continue to grow at a healthy rate, despite what happens with the large customer?
See, I think first of all, there's no question of despite what happens, because I think the underlying subtext there is that something is going to happen. As I've mentioned that fundamentally, no matter what individual players do with their respective strategies, I think our ability to maintain our market share is fairly significant. It's not something which is completely beyond the control of Delhivery. So let me start by clarifying that I think that Delhivery will have the ability to maintain its market share even as customers change their individual strategies in any given quarter. Because as an example, when you run in-house logistics and you have a situation where you've built up ahead of fixed costs, especially during a peak period or during some sort of expansion that you've planned, and your volumes are lower, you may choose to direct volumes here and there.
I'm pretty confident that a large portion of that is going to go from the weakest players, and as I mentioned, that's not us. So, I just want to stress on that for a moment, because I think underlying in your question is the assumption that that will happen, which we don't believe is true. The second bit is the non-e-commerce part of the market actually is pretty significant. India has 128,000 enterprises who have revenues which are north of INR 5 crore, and you've got about 30,000 enterprises who have revenues which are north of INR 100 crore. All of them have Express Parcel shipping requirements. Delhivery has been historically a relatively marginal player in that space. That space has been largely unorganized, largely small couriers across the board, and we're discovering that that volume is something that we can very easily acquire and serve.
It's not very different from our regular e-commerce shipping at all. Even if every single one of those customers is moving on average, call it even 100 packs a month, which is very likely, and at least our initial indications are it's more than that itself over a period of time is going to add up to 60 million, 70 million packages a year, which adds 6%, 7% growth to our existing volumes in any case. So, pretty confident that we'll be able to get to that as well.
Thanks, Swapnil.
Thank you.
The next question is from Vineet Prasad. Vineet, please go ahead. Vineet, you are on mute. Please go ahead.
Yeah, my questions have been answered. Yeah, thank you.
Okay. The next question is from Kartik Kohli. Kartik, please go ahead.
Hi, thanks for taking my question. I joined the call a couple of minutes late, so just wanted to clarify a couple of things. When you mentioned the international business closing in on the run rate of INR 140 crore, then there's Delhivery Direct. Is that the combined all of these businesses is the number that you quote in investor letter that will have a run rate of about INR 250 odd, north of INR 250 crore by the end of this year? Is that the right way to think about it?
Delhivery International standalone is at a run rate of getting close to INR 150 crore at this point in time. That's just Delhivery International. Delhivery Direct, which is provided. Now, there is Delhivery Local, which is our in-city LCV business. That has crossed a revenue run rate of INR 200 crore. That's independent of Delhivery International. Delhivery Direct, which is our consumer shipping business, which is sort of, like I said, we seriously started investing in it maybe about a little over a year ago. That is touching now INR 100 crore. That's also independent, so that doesn't include the revenues of Delhivery International or the other way around.
The overall base of such new investments is much higher, about-
Yeah
INR 450- odd crore.
That's correct.
Yeah.
That's correct.
Understood. The second, you've probably answered this in a way, but just wanted to get some better sense on it, this is my last question. When you say that your share with Meesho is broadly stable, the other demand categories is what makes us more interested because that means that you're growing much faster there. Just wanted to get a sense, is that more market-driven? Is there some quantification you have? Just so that it becomes clear in our head how fast your other segments are growing. That will be my last question. Thank you.
I think on the non-marketplace segments, as I mentioned, depending on sort of exactly how you classify what is D2C versus not, our growth rates, even in a relatively sort of weakish quarter, have never been lower than 40%-45%. I don't think that market It's so fragmented that it's hard for me to say exactly how fast that market is growing, but I would be very surprised if that market is organically growing at 45%. That said, there are pieces of e-commerce which are not very well tracked. As an example, there's a large amount of transacting volume which happens, for instance, on Instagram or on WhatsApp, and so on, that's sometimes difficult to track.
But assuming that those segments are not growing at over 45%, actually our growth rate is slightly higher than that, but anyway, assuming that those segments are not growing at 45%, it means we are gaining share in that segment as well. Now, I'm pretty confident that we are gaining share there for, one, is obviously because of the underlying growth rates that we're seeing, but B, also our integrated fulfillment model is differentiated. When you come into a Delhivery fulfillment center, automatically it makes sense for you as a customer to move more of your shipping to Delhivery, and our ability to offer a differentiated service is higher. The other piece that, to be honest, I haven't broken out because we don't report it as such, is that our SDD and NDD volumes and also now are actually pretty material.
In fact, we'd probably be the leaders in that space. So yeah, we don't break that one out. I'm sorry, man. Look, it's a bit hard to say exactly how fast that market is growing because it's so fragmented, but my sense is that we've probably gained share as well. There's fairly reasonable organic growth for sure, but I'm pretty sure that we've gained share as well.
Understood. That's very, very helpful. Thank you.
Thanks, Kartik. The next question is from Jinesh Joshi. Jinesh, please go ahead.
Yeah. Thanks for the opportunity. Am I audible?
Yes, you are.
Yeah, go ahead.
Yeah. Sir, the first question that I have is on realization. I think we have stated in the shareholder letter that the sequential jump that we have seen in realization in both the B2C and PTL business is linked to the revision in fuel prices, so to say. But if I am not mistaken, the B2C division has a higher proportion of manpower element as compared to the diesel cost. Just wanted to get some sense on this breakdown of 4% jump that we have seen in the B2C division. What could be the indicative contribution of, say, maybe fuel-led repricing as compared to wage inflation-led pass-through, and if there is organic hike, if any? Even some kind of indicative numbers would help. I thought of asking this because we have seen a sequential jump in B2C realization after, I think, maybe five or six quarters.
Yeah, that is the first question.
Sure. The answer is that less than 30% of the increase in yield, for example, in PTL, has come as a consequence of underlying cost inflation-linked price revision. A majority of it has actually just been improvements in yield.
For the PTL part, I think you had disclosed it earlier in the call as well. My question was more specific to the B2C part, where we have seen a 4% jump and which has a higher proportion of manpower element as compared to the diesel cost.
A part of the yield increase, I think if you look at it, the express yield is about INR 2.40 higher as of Q2 FY 2027 versus Q1 FY 2027. Again, less than half of that is due to inflation-linked commercial revisions.
Perfect. My second question is with respect to our new initiatives. I think given good traction that we are seeing in Delhivery Local as well as in the financial services, wherein you have cited a healthy annual revenue run rate numbers for next 18- 24 months. How to think about the EBITDA losses in FY 2028? I understand for 2027, we are maintaining our loss guidance of about INR 130 crore-INR 160 crore. Given these businesses are in expansion mode, I mean, how to think from FY 2028 perspective? Will the losses widen, or will they be lower than the figure that we have set out for FY 2027?
Yeah, it's a good question, Jinesh. There's a reason why our guidance envelope for this was a little wide when we started the FY. INR 130 crore-INR 160 crore itself is a fairly wide sort of range. As you can see, I think our first half has been INR 67 crore, which, at least as things stand, puts us more at the lower end of that range as opposed to the upper end of that range. That's not because In fact, that's happened while we actually have grown faster than expected. What's actually happening is that our contribution margins in, for example, Delhivery Local have improved faster than we expected them to improve, despite the fact that we've now expanded to eight cities.
So, actually, some of our expansion has really been only in the last two or three months, but despite that, our overall expenditure on that business has been perhaps a little lower than we expected, which is good news. I certainly hope that it continues, and it does look like it will. So, at this financial year, first of all, I think we will end up closer, probably, unless something fundamentally changes to the lower end of what we had guided. If the contribution margin trajectory is what it is and it continues, and we'll know more over the next five months, then the reality is that we may come back and talk about fiscal 2028 slightly differently.
But for the moment, the guidance that we have given to everybody publicly has always been that, look, just assume that it'll broadly be in the same range in fiscal 2028 versus fiscal 2027. But it's a little early to say, right? Because some of these things have changed for the better at the moment, despite a sort of weird environment, pretty fast. If you look at Delhivery International, for example, it's gotten to a INR 150 crore revenue run rate and has achieved service EBITDA profitability. That itself is sort of It was a little unexpected for us. We thought there'd be a slightly longer phase of investment in this business, but doesn't seem to have been. This is despite the fact that air freight rates have gone up. Trade has been highly volatile. Despite that, performance in this segment has actually been better than we thought.
I guess long answer is that we'll know as we do more of our annual planning, as the next set of cities goes live, for example, in Delhivery Local, we'll know a little better. But safe to say that it's not going to exceed the envelope that we have for this quarter, for sure.
Got it. One last bookkeeping question from my side. I think other income in this quarter was lower at about INR 66 crore as compared to the past run rate. Is there anything specific to read into it?
Jinesh, hi. Vivek here. It's entirely mark-to-market changes. We do have a large mutual fund and bonds portfolio, which are sensitive to interest rate movements. The interest rate movement has been actually fairly volatile for the last three quarters. Yields softened towards June when it seemed like the Middle East escalation was getting resolved, and that led to mark-to-market gains in first quarter, which is why, if you see, the other income for first quarter was high. The yields tightened again during second quarter when the conflict situation again escalated, and it led to MTM gains reversing. If you exclude MTM, there's absolutely no change in our other income. It's broadly flat. It's purely mark-to-market related.
Got it. Thank you. Thank you so much.
Thanks, Jinesh. Maybe, Sahil, I'll just go ahead with one or two final questions from my side.
Sure.
First question, just trying to appreciate the longevity of the PTL business, that 20% growth that you spoke about, a little better. Because if we look at some of the industry estimates, the market size seems to be INR 15,000 crore or INR 20,000 crore. I'm talking about Express B2B side. Just want to understand what's your assessment of the TAM of that segment so that we can appreciate the 20% growth guidance, at least from a longevity perspective. That's the first question.
Sure. Do you want to just ask all your questions, and I'll answer them?
Yeah. Second question is just a little bit of a clarification on the market share of the Delhivery brand. While we've seen market share gains from you in this year, and possibly you'll see some bit of that in the next year as well, but safe to say that by FY 2029, you would have reached the target market share that you'd want to be, and then it should look more like market growth or just from a consolidation of, say, the smaller players' perspective. Just these two questions from my side.
On the second one, Dhruv, you mean in the Express business, are we going to expect more consolidation?
Yes. Yes.
Yeah, good questions. On the first one, the PTL market TAM is actually a pretty easy one. The market TAM is certainly not INR 15,000 crore, right? Because if you add up possibly the six largest organized players in this market, my back-of-the-envelope, I think we will add up to nearly INR 12,000 crore. So, there is a whole host of other players. This is just like the top five. Our estimate, we have discussed this in the past, our estimate is that the TAM is conservatively at least five times of what you are talking about, sort of INR 15,000-INR 20,000 crore. The TAM is easily probably $9 billion-$10 billion, if not even more than that. That is one, because there is a huge unorganized segment in PTL, very large unorganized segment. For example, there are markets which are completely unserved by organized players.
These have historically been treated as sort of what is called in the industry ODA, which is sort of an out-of-delivery area. So, even if you are a large player who is shipping, I will give you an interesting example. Even if you are a large player who is shipping out of, say, just south of Mangalore, there is a reasonable chance that you will not be serviced by an organized player. So, there is a very large market for us to go after, which is unorganized. That is one. The second industry tailwind that we have is two things are happening.
One is that traditionally, where customers were relying on what used to be called non-Express PTL or just sort of general PTL, increasingly, with players like us being in the market, with the infrastructure we have put in, with the trucks that we have, with the improved quality of roads, there is a certain amount of migration of demand from what used to be slow PTL to fast PTL. That gets accelerated when we enter a market, because interestingly enough, there is not a very significant cost difference between economy PTL and Express PTL, because our network has the ability to provide an economy product on express rails, which is also, by the way, interestingly why the value of the service goes up. We are able to push a certain amount of yield increase, et cetera, et cetera. I think that is the other tailwind that you have.
The third is that as the market matures, there is a certain amount of switching that happens from FTL to PTL as well. Remember that as, in some senses, transportation speed is the counter to building up inventory. As businesses look at their supply chains, they have a choice whether they actually want to continue to hold larger amounts of inventory or whether they want to switch from FTL to PTL, pay a slightly higher transportation premium as you go to a part load, but ultimately carry lower inventory on your books. It improves working capital, for example, for businesses that work with us. So, there is also a shift from FTL to PTL, which is another tailwind. Net-net, I think this is a INR 90,000-INR 100,000 crore sort of opportunity at the bare minimum basis, what we know so far, possibly even larger than that.
There are these tailwinds which are making sure that growth is beyond just sort of regular GDP growth. In terms of express, I think two, three things will happen. I think the market, in any case, as we have said over the medium term, short-medium term, we think will continue to grow at that sort of 15%-20% kind of range that we have said in the past in volume terms. That is one. We definitely, in any case, our belief is that we should continue to grow at a minimum of that, if not higher, as we continue to gain share. As I have said, as the industry matures in the sense that as you ship more and more and more volume, your ability to ship more and more and more volume gets determined by sort of the quality of the underlying network. Let me put it this way.
Logistics is one of the easiest businesses to enter and one of the hardest businesses to scale. Our belief is that as we get larger, as our investments in technology and in engineering pay off, we have a differentiated ability to continue to gain scale and to continue to actually gain share in the market, irrespective of what the market's growth rates are. In any given quarter, things can always move up and down. That is a different issue. We have seen this in the past. If you look at Delhivery over the broad arc of time in 15 years, we have gone, or even if I look at the last 10 years, we have gone from having 3% of the market to today more or less being the dominant third-party shipper in the Indian market.
I think that's sort of an irreversible process, and we will continue to invest in building up a lot of these capabilities. I think that helps. That's number one. Whether the industry will consolidate or not, I've said this in the past, at the end of the day, your- The right thing for customers, the right thing for clients, the right thing for the economy as a whole, is for logistics companies to be at the most efficient frontier. That is extremely important. You can only do that when you make the kind of investments that we have. I know there's a lot of questions that we've gotten asked historically, over the decade that I've been doing this, about why we choose to build certain assets, why we choose to own our trucks, and so on.
I've said this every single time, which is that if you're serious about building a large-scale logistics business in India, asset-light is not the way to go, or a pure asset-light business is not the way to go. It is essential to build differentiated capacity. It is essential to build differentiated capabilities. Every global economy of any size has shown this. Logistics is the most crucial, sort of one of the most crucial input costs to any industry. We will continue to do this. As we do this, we have a differentiated ability to invest, not just because we have cash on the balance sheet and are now adding cash to the balance sheet every quarter. That's one part of it. There is a deep technical and engineering expertise that is built into the company over 15 years, which is sort of of intangible value.
There, I believe, our experience of 15 years of running the network that we have, the integrated network that we have, sets us apart compared to anybody else in this market. Whether or not individual players survive, don't survive, that depends on who finances them. Irrespective of that, I think we will continue to gain share. Whether the market consolidates because we buy people or because they lose share over a period of time is, in some senses, immaterial. A very long answer to your question, but fundamentally, yes, I think our share will continue to go up.
Sure. No, thanks a lot, Sahil, for this. Very useful. I'll leave you to it for the closing remarks.
Super. No, thank you, Dhruv. Thank you, Ambit team, for hosting us, and to everybody who has joined. I know it is a Friday evening, so really appreciate everybody being on the call. I think summary is that we had an interesting start to the financial year in Q1. A lot of volatility. Of course, some of it has persisted in quarter two. We continue to watch the market. It is difficult to predict exactly what will happen at the moment, but we are very satisfied with our quarter two results. It is a big milestone for Delhivery to have crossed INR 3,000 crore in revenues. Profitability is where we expect it to be. We had a good start to the peak season, and so let us see how the rest of the FY proceeds. Thank you.
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