Delhivery got Ecom Express for a song. Will it pay off?

In acquiring Ecom Express, Delhivery has gotten itself a sweet deal. At Rs 1,407 crore, Delhivery has bagged its smaller rival at an 80 per cent discount to its peak valuation of Rs 7,000 crore! While the cut-price price tag is eye-catching, a critical question still remains. Does this bargain justify the value Ecom Express brings? That's a question D-Street should seek an answer to before ruling out the deal as a sound investment. But first, what caused Ecom Express' valuation to plummet? In one word, Meesho. Ecom Express relied on Meesho for over 50 per cent of its business. And this quickly became a vulnerability. In February 2024, Meesho launched its in-house logistics arm, Valmo, which scaled rapidly within months. By December 2024, Valmo was already handling more than half of Meesho's daily orders across over 15,000 pin codes. This was a huge blow to Ecom and the fallout has been visible in its slowing revenue. The company reported Rs 1,912 crore in revenue for the first nine months of FY25. When we annualise this, the estimated full-year revenue comes to around Rs 2,500 crore, down nearly 4 per cent from FY24. Even the growth for the preceding year (FY24) was unimpressive at just 2 per cent. Adding to the pressure has been a broader slowdown in the e-commerce market with a drop in shipment volumes as inflationary pressures weigh on consumer sentiment. With these issues, Ecom Express certainly didn't