Delhivery rises 2% as MOFSL initiates coverage with 'Buy'; 18% upside eyed

Business Standard

5 days ago

Delhivery share popped after Motilal Oswal Financial Services (MOFSL) initiated coverage on the company with a 'Buy' rating and a target price of ₹460, implying an 18% upside.
Tanmay Tiwary New Delhi
Delhivery share price: Logistics major Delhivery shares were in focus on Wednesday, July 9, 2025, rising as much as 1.99 per cent to hit an intraday high of ₹417.50 apiece.
At 9:41 AM, Delhivery shares continued to trade near day's high level, up 2.09 per cent at ₹417.50 on the BSE, even as the benchmark Sensex was down 0.17 per cent at 83,569.51 levels.
Why did Delhivery shares rise today?
The Delhivery share popped after domestic brokerage Motilal Oswal Financial Services (MOFSL) initiated coverage on Delhivery with a 'Buy' rating and a target price of ₹460, implying an 18 per cent upside.
'We initiate coverage on Delhivery with a 'Buy' rating. We value the company using DCF, arriving at a TP of ₹480 based on a WACC of 12 per cent and terminal growth rate of 5 per cent (implied EV/Ebitda of 36x on FY28),' MOFSL said in a note.
Strong position in express logistics; asset-light model
According to MOFSL, Delhivery has built a strong foothold in the express logistics segment since 2011 and continues to scale in the high-margin partial truckload (PTL) market. The company operates an asset-light model with minimal owned vehicles and leased infrastructure, servicing ~19,000 pin codes across India.
Key beneficiary of express logistics boom
With express delivery demand rising across Tier 2/3 cities, analysts at MOFSL believe the segment is expected to grow at a 14 per cent CAGR over FY23–28. Delhivery's expanding customer base, new category launches, and e-commerce penetration (D2C, social commerce, omnichannel) position it well. Its e-commerce express market share doubled to ~25 per cent in FY24 (ex-captive: ~40 per cent) from ~12 per cent in FY19.
Established 3PL network with scale advantage
Delhivery has emerged as a leading third-party logistics (3PL) player, backed by major infrastructure, including 111 gateways, 45 automated sort centres, and 20 million sq ft of space, MOFSL highlighted. It serves 44,000 customers, enabling large-scale, on-time parcel handling.
14% revenue CAGR seen over FY25–28
After a 32 per cent revenue CAGR in FY19–25, MOFSL expects Delhivery to post a 14 per cent CAGR over FY25–28, driven by PTL industry growth (18 per cent CAGR), scale benefits post-Spoton integration, and rising share of integrated solutions (~60 per cent of revenue from customers using multiple services). The acquisition of Ecom Express is seen boosting its express logistics footprint further, the brokerage said.
Margin expansion led by volumes and PTL
With higher volumes, Delhivery is expected to benefit from operating leverage in express parcels. The Partial Truckload (PTL) segment, a high-margin business, is expected to contribute majorly to profitability post-Spoton integration. The Ebitda margin is estimated to rise from 4.2 per cent in FY25 to 7 per cent by FY28.
Well-set to capture long-term opportunity
Delhivery turned Ebitda positive in FY25 with ₹370 crore, recovering from a ₹1600 crore loss in FY19. MOFSL sees Ebitda and adjusted PAT (APAT) growing at 36 per cent and 52 per cent CAGR, respectively, during FY25–28, and return on equity (RoE) improving to 5.6 per cent in FY28 from 1.8 per cent in FY25.
Backed by volume growth, cost efficiency, and stronger offerings, the brokerage believes Delhivery is well-positioned to tap the long-term potential in express logistics.