Delhivery trims Ecom Express integration costs below ₹300 cr estimate

Delhivery, India’s largest integrated 3rd party logistics service provider, said Ecom Express integration costs are expected to be below the initial guidance of ₹300 crore. The company is now projecting an integration expenditure of ₹100 to ₹110 crore over the next two quarters.

Delhivery acquired Ecom Express for up to ₹1,407 crore in cash. The deal was finalised on July 18, 2025, with Delhivery now holding a stake of over 99.87%.

The company has already incurred ₹90 crore in integration costs during the second quarter (Q2).

During a post-results call, Delhivery Chief Executive Sahil Barua said, "Our belief is that the total integration cost will be marginally lower than the ₹300 crore that we had originally forecast."

The initial ₹300 crore estimate, according to Barua, was based on assessing real estate lock-ins, facilities, and the cost of managing the acquired workforce and winding down certain inherited contracts.

Delhivery is projecting an integration expenditure of ₹100 to ₹110 crore over the next two quarters. The company has already incurred ₹90 crore in integration costs during the second quarter (Q2).

The company has rationalised the acquired Ecom Express footprint. The network rationalisation plan is complete, with only seven facilities (1.3 million sq. ft.) retained for long-term Delhivery usage, while nearly 1.1 million sq. ft. has been exited.

Furthermore, Delhivery has successfully reduced approximately 85% of Ecom Express’s corporate and support costs since the deal was completed on July 18.

Management also confirmed that volume manifestation at Ecom ceased during Q1, and the exit of non-express businesses is in progress. Barua noted that "Ecom was in certain businesses that Delhivery doesn’t want to service. That will also just wash out and go to zero," indicating plans to wind down these inherited contracts.

Strong volume rebound and GST impact
Delhivery’s express parcel volumes saw a significant boost in Q2FY26, rising to 246 million orders, marking a 32% year-on-year and 18% sequential increase.

The company experienced a 7.2-million single-day peak during the broader festive window. Volumes for this period shifted towards late September and early October, a change attributed to the demand timing adjustments following the government's goods and services tax (GST) reforms.

Barua noted a temporary drag on consumption due to the GST changes, which became effective from September 22 and eliminated the 12% and 28% rate slabs in favour of a two-slab system (5% and 18%).

"When the GST rates were changed, I think people consciously postponed consumption… That is why during the middle 10 days in September, there was actually a dip in consumption," he added. The subsequent volume rebound was led by categories like consumer durables.

Expanding service offerings and new platform launch
The logistics company is broadening its service by introducing two new platforms. One of these, Rapid, launched in January 2025, is a sub-two-hour delivery service.

It caters to D2C and e-commerce brands, fulfilling the increasing need for expedited deliveries. This service leverages a network of dark stores to process orders for clients in fashion, beauty, and electronics, thereby enhancing the customer experience.

Initially launched in Bengaluru, the service is expanding rapidly to other metros and plans to be cost-efficient with a lean model, aiming for profitability within six months of each dark store's launch.

Direct platform offers on-demand delivery services for individuals and businesses, enabling local (intracity) and national (intercity) shipments via a mobile app.

It provides rapid local pickups within 15 minutes for various consignment sizes, utilising a diverse vehicle network. Additionally, the service manages intercity deliveries from the customer's doorstep to over 18,800 pin codes across India, serviced by Delhivery.

In a separate move to enhance market transparency, Delhivery has launched Freight Index One. This open platform is designed to provide historical, current, and forward Full Truckload (FTL) pricing estimates for major trucking lanes and vehicle types.

“Through Freight Index One, we plan to open up freight rate data and forecasts to partners from the logistics industry, including freight brokers and shippers, and to partner with them and deepen the accuracy and coverage of the index,” said Kapil Bharati, Chief Technology Officer at Delhivery.

He further said that offering access to diverse stakeholders would facilitate efficient price benchmarking, empowering customers to better plan budgets and negotiate rates using comprehensive market data. This is an initial launch, and the index's accuracy will improve as more market participants contribute feedback to the underlying models.