- Shadowfax plans to cover all 19,000 pincodes in India gradually
- The company improved EBITDA from negative 7% to positive 3% recently
- Capital investments focus on automated sorters and core bulk operations
Shadowfax Technologies that saw a discounted debut on the markets plans to slowly cover all of the 19,000 pincodes in India. While the opening was negative Abhishek Bansal, co-founder and CEO of Shadowfax and Vaibhav the co-founder are confident that the growth the company is set to deliver is something “the street will love.”
When asked about the interesting name Abhishek Bansal, Co-founder and CEO of Shadowfax said inspiration came from the world of J.R.R. Tolkien. A self-confessed fan of the autor of The Lord of the Rings, Bansal says the company's name was part of an early attempt to carry forward a theme inspired by Tolkien's stories.
“When we started, we kept the names aligned to Tolkien's universe. It went well with the theme we were looking at. Given that we were B2B, we didn't overthink the branding then, but it has grown on us,” Bansal recalls.
“This was never the destination. We are proud of what we've done and humbled to have landed here, but our ambition is barely 10% complete in terms of what we believe Shadowfax can achieve,” he told NDTV Profit.
Talking about operating leverage Bansal said that over the first half of the current year, the company has seen a dramatic swing in profitability, moving from a negative 7% Ebitda to a positive 3%.
“This business has a phenomenal amount of operating leverage,” Bansal explains. “We've expanded from servicing 7,000 pincodes to over 14,000, and much of that has come through better utilisation.”
Vaibhav highlights that capital expenditure is being deployed with precision. Investments are focused on automated sorters, conveyors, X-ray machines and core facilities where bulk operations take place, rather than experimental formats.
“Our philosophy is to invest in the right direction and ensure the right utilisation of assets to unlock operating leverage,” he says.
Explaining in what works and what the company needs to work on. The co-foundes said that the last-mile delivery is to bring in higher order volumes, driving down cost per order. Middle-mile trucking — which accounts for nearly 20% of total costs — will become more efficient as truck utilisation improves with scale. Meanwhile, a centralised technology backbone allows the company to grow revenues without a proportional rise in headcount.
“Employee costs have already come down to about 30%, and that trend should continue,” Bansal notes. According to him the tech stack is a significant advantage for the company.
He further said that Shadowfax operates without dark stores and initially has to runs sub-optimally in newer towns. As volumes rise, efficiency improves organically, they added.
Looking ahead, Vaibhav points out that India has nearly 19,000 pincodes, and Shadowfax is steadily moving toward full national coverage as e-commerce penetration deepens further.
Despite ongoing inefficiencies inherent in rapid expansion, the founders remain confident. With revenue growth of around 60% in the first half, Shadowfax believes margins will steadily converge toward its long-term targets.
“These models are difficult to replicate,” Bansal concludes. “Even globally, similar platforms operate at low single-digit profitability. We are already profitable despite inefficiencies — and that gives us strong conviction in where we're headed.”
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