Shadowfax's Quarterly Profit Jumps More Than Fivefold to ₹68 Crore as Revenue Surges 57% on Quick Commerce and E-Commerce Deliveries

For much of the past decade, last-mile delivery in India was seen as a low-margin, high-volume business where companies raced to grow while burning cash. The latest results from Shadowfax suggest that, for the best-run operators, that era is giving way to sustained profitability.

The Bengaluru-based logistics company reported profit of ₹68 crore for the July-September quarter, up more than fivefold from ₹13 crore a year earlier and higher than the ₹65 crore it earned in the April-June quarter, according to StartupTalky on Thursday, October 29. Revenue from operations rose 56.6% to ₹1,538 crore.

The listed company had a market value of about ₹17,112 crore, according to the report.

Growth and profit together

The combination of rapid revenue growth and rising profit is notable in logistics, where companies often have to choose between expanding quickly and protecting margins. Shadowfax's revenue grew by more than half in a year, while profit rose sharply, indicating that the company is spreading its fixed costs over a larger volume of deliveries.

Sequential growth in profit, from ₹65 crore to ₹68 crore, also suggests that the improvement is not a one-off. Profitability has been sustained across consecutive quarters, which is important for investors assessing whether the business model can support continued earnings growth.

What Shadowfax does

Founded in 2015 by Abhishek Bansal and Vaibhav Khandelwal, Shadowfax provides last-mile and hyperlocal delivery services for e-commerce companies, quick commerce platforms, food delivery services and other businesses. It operates a large network of delivery partners, many of whom are gig workers who use their own two-wheelers, and has built technology to allocate orders, optimise routes and manage its fleet.

The company handles a range of deliveries, from parcels ordered on e-commerce marketplaces to groceries delivered within minutes and returns collected from customers' homes. This diversity of services allows it to use its network more efficiently throughout the day, as different types of orders peak at different times.

Riding the quick commerce wave

One of the biggest drivers of demand for delivery services in India has been the explosive growth of quick commerce, in which groceries and everyday items are delivered within 10 to 30 minutes from small warehouses known as dark stores. Platforms such as Blinkit, Swiggy Instamart, Zepto, Flipkart Minutes and Amazon's rapid delivery service have expanded rapidly across Indian cities.

Quick commerce companies often rely on third-party logistics providers to supplement their own delivery fleets, particularly during peak hours and in new cities. This has created a large and growing source of demand for companies such as Shadowfax.

E-commerce growth has also continued, with platforms such as Flipkart, Meesho and Amazon reaching hundreds of millions of shoppers, many in smaller towns. Meesho, which relies heavily on third-party logistics partners, reported this week that it had 28.4 crore annual transacting users.

The festive season boost

The September quarter included the start of India's festive shopping season, when e-commerce platforms run major sales events and order volumes surge. While the biggest festive sales typically fall in late September and October, preparation and early sales lift volumes in the second quarter. The October-December quarter is likely to see even stronger festive demand, which could further support Shadowfax's results.

Competition in logistics

India's logistics sector is highly competitive. Shadowfax competes with Delhivery, India's largest listed logistics company, as well as Ecom Express, Xpressbees, Ekart (Flipkart's logistics arm), Amazon's in-house logistics network and numerous smaller players. Large e-commerce and quick commerce platforms have also built their own delivery fleets, reducing their reliance on third parties.

To compete, logistics companies focus on cost efficiency, delivery speed, technology and reliability. Shadowfax's focus on hyperlocal and last-mile delivery, combined with a flexible network of delivery partners, has allowed it to serve fast-growing segments such as quick commerce.

The gig worker question

Shadowfax's business, like that of many delivery companies, depends on gig workers. The welfare of these workers has become an important policy issue in India. The central government's labour codes include provisions for social security for gig and platform workers, and states such as Rajasthan and Karnataka have introduced laws requiring platforms to contribute to welfare funds.

These regulations could raise costs for delivery companies, but they also aim to provide workers with greater security. How companies balance profitability with fair treatment of their delivery partners will be closely watched by regulators, investors and the public.

India's logistics opportunity

India's logistics costs have historically been high relative to the size of its economy, and the government has set a goal of reducing them through infrastructure investment, digitisation and policy reforms. The National Logistics Policy and the PM Gati Shakti plan aim to improve the efficiency of freight movement across the country.

Last-mile delivery is a crucial part of this ecosystem, particularly as e-commerce penetration grows. Companies that can deliver efficiently to homes and businesses across India's diverse geography, from dense metropolitan areas to small towns, are well positioned to benefit.

From startup to listed company

Shadowfax's journey reflects the maturing of India's startup ecosystem. Many startups that once relied on venture capital to fund losses are now listed on stock exchanges and reporting profits. Investors in public markets typically demand profitability and steady growth, pushing companies to focus on efficiency.

Other recently listed new-age companies, including Meesho and Ather Energy, have also reported improving results, suggesting that India's crop of startup listings is increasingly delivering on the expectations of public market investors.

What it means for investors

For investors, Shadowfax's results demonstrate that last-mile logistics can be profitable at scale. The company's ability to grow revenue by more than 50% while expanding profit suggests strong operating leverage. Key questions include whether it can sustain this growth as competition intensifies, how dependent it is on a small number of large clients and how rising labour costs could affect margins.

The technology edge

Technology has become a key differentiator in logistics. Shadowfax uses software to match orders with delivery partners, predict demand, optimise routes and track deliveries in real time. As volumes grow, small improvements in efficiency, such as reducing the distance travelled per delivery or increasing the number of deliveries per hour, can have a significant impact on profitability.

Artificial intelligence is increasingly being used in logistics to forecast demand, plan capacity and automate customer service. Companies that invest in these capabilities are likely to gain a cost advantage over less technologically advanced competitors.

What comes next

Shadowfax's next quarterly results will cover the peak of the festive season, providing a test of its ability to handle surging volumes while maintaining profitability. Investors will watch its revenue growth, margins and client diversification, as well as any expansion into new services or cities. With India's e-commerce and quick commerce markets continuing to grow, the demand for efficient last-mile delivery appears set to rise for years to come, and Shadowfax has shown that it can turn that demand into profit.