Shiprocket Q1 FY27 earnings call

Where management's figures differ from the filing

• Adjusted EBITDA: said Adjusted EBITDA grew 9x to INR8.9 Crore (cash EBITDA, adjusted for ESOP and Ind AS 116 rent).; filed EBITDA excluding other income: ₹-10.87 cr.. Definitional gap: management reports cash EBITDA after adding back ESOP cost and reversing Ind AS 116 rent treatment; filed PBT-based EBITDA is a different measure.

What moved the numbers, as management explained it

• Larger D2C merchants grew faster than long-tail, shifting core mix and improving revenue per transaction despite only +22% revenue growth.
• Rate compression on input side from courier partners added to core EBITDA margin (+50 bps YoY).
• Emerging contribution margin expanded ~600 bps (9.3%→15.3%) on MarTech mix shift and operating leverage.
• Cross-border revenue declined marginally as global volatility hit merchant confidence; focus shifted to higher-margin customers.
• Higher ESOP cost (non-cash) explained the INR3.6 cr gap between EBITDA improvement (INR7.9 cr) and PAT improvement (INR4.3 cr). (accounting)

The numbers management led with

• GMV (FY26): INR 32,000 cr
• TTM transactions: 216 million
• TTM GMV: INR 34,600 cr
• Core EBITDA margin trajectory: 6% → 12.6% → 12.8% (3-year trajectory to Q1 FY27)
• Emerging EBITDA margin improvement: -38% → -24% in 12 months (1380 bps)
• Adj EBITDA per transaction: INR 0.22 → INR 1.45 YoY

By business

The industry, as management sees it

Management sees India retail penetration at only 8% (vs US/China) with half of e-commerce already coming from Tier-2+ cities and ~6 cr MSMEs to digitize — D2C/off-marketplace is described as the fastest-growing part of the market. Q3 festive seasonality is flagged as a structural headwind unique to off-marketplace sellers, while cross-border sentiment is currently soft on global macro volatility.

Risks management named

• Cross-border business hit by global macro volatility — currently focused on higher-margin customers
• Q3 seasonality is structural — merchants redirect inventory to marketplaces during festive season, hurting off-marketplace volumes
• Emerging business still loss-making at EBITDA level (~-24% margin), break-even timing not committed

Not answered directly

• Emerging segment EBITDA break-even timing
• CAC drivers and trend outlook
• Split of domestic shipping vs value-added services within core

Asked for a number, answered without one

• Emerging business EBITDA break-even timing: won't be able to give you a timeframe in terms of guidance; pointed to mix shift toward MarTech and operating leverage as drivers
• MarTech penetration into core merchants: We don't segmentally kind of break that out; described MarTech as a healthy mix across the stack rather than concentrated in top merchants
• Realization differential between largest and long-tail customers: Said pricing is a function of volume and merchants as they grow may pay slightly lower shipping rates; gave no quantification
• CAC future trajectory: Said CAC has been held up over many years and won't trend into ever-increasing number; framed it as experiments without quantified trajectory

Every question, with its answer

1. 1. Core margins sustainability

   Sachin Salgaonkar, BofA Securities

   Question. Core grew 22% YoY with contribution margin and EBITDA margin improving faster than revenue. Is this trend sustainable and can we model 12.5-13% as steady-state EBITDA margin for core?

   Answer, Saahil Goel, Managing Director and CEO. CM is a function of enterprise vs long-tail mix, shipment modes and zones, plus operating leverage on people cost. CM improved this quarter and we expect it to maintain around the recent range. Adjusted EBITDA has moved from 6% to 12.8% over three years. The design of the business means every core transaction is margin-accretive after overheads; you can model where it goes based on overhead growth rate and the structure of the business.

   Follow-up. How should one think about emerging segment EBITDA margin contribution? Should we expect material improvement as MarTech inflects, and any timeframe for EBITDA break-even?

   Answer. Won't be able to give a timeframe for guidance. MarTech is higher margin and growing rapidly (small base). Emerging CM went from ~9-10% to ~15% YoY; emerging adj EBITDA moved from -38% to -24%. Two levers: mix shift toward MarTech and operating leverage. Similar playbook to core.

   Not answered directly.

2. 2. Customer acquisition cost

   Della Desai, Axis Capital

   Question. Core CAC has moved up both YoY and QoQ (from INR2,800 to ~INR3,600 this quarter). What drove the increase and how should we think about it?

   Answer, Saahil Goel, Managing Director and CEO. CAC is driven by experimentation in digital marketing channels (YouTube, Google, organic content, events), plus inside sales for onboarding. At ~INR3,000, the CAC typically breaks even from customer margin in a short span. We do not expect CAC to trend ever-upward; it's a function of experiments, not seasonality.

   Follow-up. How many power merchants are using MarTech today, and how to think about MarTech penetration into core GMV?

   Answer. We don't break that out segmentally. MarTech follows a foot-in-the-door model — checkout as the entry product, then productized adoption across the stack. Healthy mix across top merchants, power merchants and long tail — not concentrated in one segment.

3. 3. 3PL competition in D2C

   Della Desai, Axis Capital

   Question. 3PL partners are getting focused on D2C and SMB segments. Are you seeing competition or threat from 3PLs in D2C?

   Answer, Saahil Goel, Managing Director and CEO. Our business model is to connect with leading 3PLs across hyperlocal, air, surface, forward, reverse, special logistics. We don't own assets; we integrate. Overwhelming majority of INR32,000 cr FY26 GMV was D2C channel. Context and data come from the platform being tailored to merchant needs, with several sub-segments and workflows built over years. We continue to focus on finding new problems to solve.

4. 4. Power merchants dynamics

   Avnish Sharma, JM Financial Services

   Question. Power ARPU is up ~25% but number of power merchants is slightly lower YoY. Is the ARPU increase only from existing merchants spending more, or is there a cohort mix effect?

   Answer, Saahil Goel, Managing Director and CEO. Overall merchant base on TTM is now 2,24,000+. Power ARPU growth has been stronger because top merchants are growing much faster in the market. Our overall base acts as a funnel — merchants succeed, get retained and graduate into power merchants. Larger merchants are growing faster, and we have doubled down on expanding the funnel.

   Follow-up. Any seasonality in the business on a whole-year basis? Is Q3 better or worse, and is any quarter expenditure-heavy?

   Answer. One seasonality is baked in: in Q3 (festive season), our merchants pull out of direct marketing and redirect inventory to marketplaces, which are bigger. So Q3 tends to be not the best quarter for us, unlike general e-commerce trends. No other seasonality effects.

5. 5. Right-to-win and merchant graduation

   Kunal Thanvi, Banyan Tree Advisors

   Question. (1) Have large D2C customers ever scaled up and moved to direct logistics partnerships, leaving Shiprocket? (2) What is the realization differential between a large D2C like Mamaearth and long-tail merchants? (3) In emerging segments where competitors exist, what is the right-to-win? Is it easier to convert an existing customer or a new merchant?

   Answer, Saahil Goel, Managing Director and CEO. Pricing is volume-based, so larger brands may pay slightly lower shipping rates — that's how the market works. But as an aggregator, the value is access to multiple contracts across 42 couriers with routing intelligence from 70 cr+ shipment data; this becomes more valuable as brands get larger, not less. On emerging: data scale and integrated stack across checkout, ads, omnichannel and PTL drives outcomes. Cross-sell from core is natural; merchants can also enter via emerging (e.g., marketing) and later adopt shipping. The principle: enable merchant orders and monetize more margin pools on the same order, irrespective of entry point.

   Follow-up. Deeper dive on MarTech opportunity — market size, our right-to-win, are ads limited to merchant's own website or extended to Instagram/Facebook, and is large part of MarTech revenue direct flow-through to profits?

   Answer. MarTech helps merchants get more orders from existing traffic (conversion suite) and better traffic/ROAS on Instagram, Facebook, WhatsApp via delivered-ROAS model linking delivery data to marketing targeting. We sit on actual purchase data — catalog, consumer, inventory — so we can ground creatives in purchase data. New but exciting business; will double down.

6. 6. Realization per shipment

   Shreyansh Talesra, Unknown

   Question. TTM shipments ~216 mn and TTM core revenue ~INR15,600 cr gives average realization ~INR72/shipment, vs INR96/89/84 in FY24/25/26. How should I read this decline?

   Answer, Tanmay Kumar, Chief Financial Officer. The number you referenced is overall transactions (including checkout), not purely core shipments — overall transactions measure unique orders. Realization decline is partly because emerging (now 30% mix) has MarTech which skews the average. On margins, the overall business has been improving.

   Follow-up. Do you separately call out shipments for core only? And within core, what is the split between domestic shipping platform and value-added services like Delivery Boost/early COD?

   Answer. We don't call out core-only shipments. Core transactions grew 31%, revenue 22% — margin expansion is from input cost compression passed through and mix shift toward larger merchants. We don't disclose the breakup between domestic shipping platform and value-added services within core. The philosophy is to add transactions rather than expand every drop of margin — INR32,000 cr GMV last year had 25-30% going to marketing, so transaction is the valuable lever.

   Not answered directly.

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