Synopsis:
Meesho is quickly growing its in-house delivery service, Valmo, which reduces its reliance on third-party couriers. This change poses a risk to Delhivery’s main parcel business. Lower order volumes might affect its growth and profits.
In this article, we will dive into the details on how Meesho, which was one of the largest customers, can pose a threat to Delhivery’s business. So without wasting any time lets dive into it.
With a market capitalisation of Rs 30,050 crore, the shares of Delhivery Ltd closed at Rs 402.05 per share, down by 1.8 percent from its previous day’s closing price of Rs 409.30 per share. Post its listing on the stock exchange in February 2025, the shares of the company have already corrected by 26 percent.
The Threat
Meesho has been aggressively growing its internal delivery division, Valmo, to reduce the dependence on third-party logistics companies. Valmo presently engages over 18,000 active logistics partners and 1,02,000 delivery agents all over India, while operating a completely asset-light model. This has enabled Meesho to deliver products at lower costs, which it also gives back to sellers, thereby making its platform more competitive.
Through this robust growth, Meesho is bringing a big part of its deliveries in-house. Valmo was responsible for more than 76.3 crore orders of the total 159 crore shipments in FY25; thus, Meesho’s reliance on outside couriers was significantly reduced. As Valmo continues to expand, Meesho will require fewer third-party deliveries, such as those from Delhivery.
Such a transition can be detrimental to Delhivery as about 60 percent of its revenue is generated from express parcel deliveries. If a major e-commerce platform like Meesho decides to route most of its orders through its own network, Delhivery may experience reduced volumes, slower growth, and margin compression. Analysts are of the opinion that if more marketplaces take up similar insourcing models, it may pose a wider challenge to the logistics sector.
Meesho, a platform that enables millions of small sellers to reach customers all over India, is aggressively growing the in-house delivery arm, Valmo. This means that by doing more deliveries on its own at lower prices, Meesho is reducing its dependency on the third-party courier services like Delhivery.
Leading global brokerage, Jefferies, also downgraded and has assigned a target price of Rs 390 per share, signalling a downside of 5 percent from its previous day closing price of Rs 409.30 per share. It added that how this could impact its business as Meesho was not only one of the biggest contributors to Delhivery, but now it also faces one of the toughest competitions from one of its customers.
Q2 Highlights
Delhivery reported a revenue of Rs 2,559 crore in Q2 FY26, representing a 17 percent growth from Rs 2,190 crore in Q2 FY25. Additionally, it recorded a growth of 12 percent from its previous quarter figure of Rs 2,294 crore.
Coming to its profitability front, the company reported a net loss of Rs 50 crore in Q2 FY26 as compared to a profit of Rs 10 crore in Q2 FY25 and a profit of Rs 91 crore in the first quarter of FY26.
In Q2 FY26, the company derived 63 percent of its revenue from the Express Parcel segment followed by 21 percent from the PTL segment, 6 percent from TL, 7 percent from Supply Chain Services (SCS), 1 percent from Cross Border and the remaining from Others.
In conclusion, Meesho’s strong move with Valmo presents a real challenge for Delhivery. Since Meesho is now handling more of its own deliveries, it relies less on Delhivery than before. This could mean Delhivery will have fewer packages to deliver, which can negatively impact its business and profits. If other online shopping apps follow suit, Delhivery might face even greater issues. The next few months will reveal if Delhivery can adapt and remain resilient in this new landscape.
Written by Satyajeet Mukherjee
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
