Are Delhivery Ltd latest results good or bad?

Delhivery Ltd's latest financial results for Q2 FY26 reveal a complex scenario characterized by strong revenue growth but significant challenges in profitability and operational efficiency. The company reported net sales of ₹2,559.32 crores, reflecting an 11.57% increase quarter-on-quarter and a 16.88% rise year-on-year. This performance marks a record high in quarterly revenue, indicating continued market share gains in the competitive logistics sector. However, the operational metrics tell a different story. Delhivery experienced a net loss of ₹50.38 crores in Q2 FY26, a stark contrast to the profit of ₹91.05 crores in the previous quarter. This represents a substantial deterioration in profitability, raising concerns about the sustainability of its business model. The operating margin, excluding other income, fell dramatically from 6.49% to 2.66%, marking the weakest operational performance since March 2024. Such margin compression, coupled with rising employee costs that outpaced revenue growth, highlights significant operational inefficiencies. The company's financial performance has led to an adjustment in its evaluation, reflecting the growing concerns among investors regarding profitability amidst aggressive expansion strategies. Despite the revenue growth, the sharp decline in profitability and operational metrics suggests that Delhivery faces critical challenges that need to be addressed to maintain its competitive position in the logistics industry. In summary, while Delhivery Ltd continues to show strong revenue growth, the significant losses and operational inefficiencies present serious questions about its future profitability and overall business viability. The recent results indicate a need for management to focus on improving operational efficiency and stabilizing profitability to reassure investors and sustain its market position.