Motilal Oswal's research report on Delhivery
Delhivery reported a 6% YoY increase in revenue to INR22.9b in 1QFY26. EBITDA surged 53% YoY to INR1.5b, resulting in an improved EBITDA margin of 6.5%. Adjusted PAT came in strong at INR911m, up 53% YoY, supported by margin expansion and disciplined cost management. Delhivery’s core transportation segment, comprising Express Parcel and Part Truckload (PTL), saw healthy volume growth (Express Parcel: +10% YoY and PTL: +15% YoY), supported by improved services and network utilization. Service EBITDA margins for Express Parcel/PTL stood at 16.3%/10.7%, underscoring Delhivery’s operational efficiency and scale advantages. Performance in the supply chain services (SCS) and cross-border businesses remained muted primarily due to strategic exits from unprofitable contracts and weak seasonal demand in select verticals.
Outlook
With improvement in service EBITDA margins and an improved outlook, we raise our EBITDA estimates for FY26/FY27/FY28 by 19%/12%/5% and expect Delhivery to report a CAGR of 14%/38%/53% in sales/EBITDA/APAT over FY25-28E. Reiterate BUY with a revised TP of INR500 (based on DCF valuation).
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