ICICI Securities's research report on Delhivery
In Q1FY26, Delhivery beat estimates in terms of growth and profitability. Express parcel volume grew 13.7% YoY, improving from FY25’s 2–3% volume growth trend. This validates our thesis that Delhivery should be a key beneficiary of demand recovery in e-commerce (link) and consolidation in the express parcel segment. In PTL, adverse seasonality restricted Q1 growth (17% YoY), as expected. However, management reiterated its 20% YoY FY26 revenue growth guidance. PTL’s margin sustained sequentially on Q4FY25’s high base. Delhivery also trimmed certain margin dilutive parts of its SCS and crossborder businesses. Management guides for strong growth in express parcel business in Q2FY26 as the Ecom Express integration plays out. Maintain BUY with a higher TP to INR 600, rolling forward our valuation by six months. Our TP implies 39x 1-year forward EV/EBITDA, up from 34x earlier.
Outlook
We maintain BUY on the stock with a revised target price of INR 600 (earlier INR 500), as per our three-stage DCF model. The implied EV/EBITDA at our TP is 39x one-year forward. Key risks: 1) Pricing pressure in express parcel or PTL business; and 2) medium-term growth visibility worsening due to global headwinds.
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