Delhivery says Ecom Express overlap won't complicate integration or growth

Logistics firm Delhivery expects margin accretion of ₹300 crore over two quarters post-deal

Delhivery does not expect customer overlap with Ecom Express to complicate the integration process or affect its growth strategy. Addressing investor concerns, the logistics firm stated in an exchange filing on Friday that nearly 100 per cent of Ecom’s customers are already being served by Delhivery, making the integration significantly smoother than past acquisitions such as SpotOn.

 

“This acquisition enhances Delhivery’s operating scale and furthers our vision to become the bedrock of commerce in India,” the company said.

 

Market analysts had earlier flagged the overlap as a concern, suggesting the deal might not be earnings accretive in the near term. However, Delhivery maintained that the integration of Ecom Express will help improve the utilisation of network assets, reduce operational redundancies, and enhance overall profitability.

 

Despite temporary integration costs, the acquisition is projected to be margin accretive, with Delhivery estimating a ₹300 crore benefit over the two quarters following completion.

 

Delhivery will retain qualified Ecom Express employees

Delhivery said it plans to retain “qualified operating staff from Ecom Express, which is the bulk of the company’s total employee base.” It also noted that its own headcount is larger, and that most of Ecom’s infrastructure will likely be phased out by the end of the ongoing financial year (FY26).

 

While a few key facilities will be retained, they will be integrated into Delhivery’s existing network. “These will be seamlessly configured by our systems as nodes within the Delhivery network, just as we would do for any new infrastructure, and will be activated as such,” the company said.

 

Ecom Express currently operates around nine million square feet of logistics infrastructure, including 3,750 facilities nationwide. Delhivery plans to evaluate these assets under three categories: those that will replace Delhivery’s existing facilities due to capacity constraints, those that can be repurposed for different logistics functions, and those that will be exited.

 

Ecom Express assets may cut capex and offer margin gains

Delhivery believes its valuation of Ecom Express has been conservative and sees potential to boost profits by applying its strong network design and operational efficiency. It expects the deal to lower capital spending as a percentage of revenue.

 

Ecom Express has assets worth ₹450 crore in plant and equipment that are currently underutilised, offering room for growth without substantial new investment. Delhivery also stated that it does not anticipate any unexpected liabilities.

 

Ecom Express reported a net loss of ₹398 crore for the first nine months of FY25, of which ₹215 crore was on account of non-cash fair valuation losses on financial liabilities. Adjusted for this, operational losses stood at ₹184 crore.

 

Delhivery will acquire Ecom Express in an all-cash transaction

Delhivery announced the acquisition of a controlling stake in its rival Ecom Express for ₹1,400 crore in an all-cash transaction. The acquisition, which was disclosed on April 5, is expected to be completed within six months, subject to regulatory approval from the Competition Commission of India (CCI).