Despite Delhivery missing analyst estimates, Jefferies sees 55% upside. Here’s why

According to the analysts, the company should break even in FY25E-26E with management’s focus on profitability.

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26 Aug, 2025 12:21

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Even though Delhivery’s operating loss for the September quarter was much higher than Jefferies’ analysts’ expectations, the brokerage’s analysts sound extremely optimistic about the company.

The analysts were expecting the company’s Ebitda loss to shrink to Rs 9.4 crore but the loss shrank only to around Rs 15.5 crore. The loss is still significantly lower than the loss of Rs 137.8 crore a year ago.

In their latest report on Delhivery, the analysts wrote that the stock would see a 55 percent upside from its current Rs 403 levels. They have set their target price at Rs 605, at 3.4x FY26 sales.

Also read: Delhivery Consolidated September 2023 Net Sales at Rs 1,941.75 crore, up 8.11% Y-o-Y

The analysts noted that the stock traded at a high of 3.9x EV/sales since IPO and is currently at 2.8x FY25E, and added that with volume and margin recovery, it should see a re-rating to its previous peaks.

According to the analysts, the company should break even in FY25E-26E with management’s focus on profitability in an industry with a strong growth tailwind.

They also noted the company’s dominant position in the B2C segment and its increasing presence in the B2B segment with the Spoton acquisition. They expect organised players such as Delhivery to see a double-digit growth in the B2B logistics industry.

Also read: E-commerce companies saw 15% growth this festive season, says Delhivery’s Sahil Barua

The report stated that the B2C volumes are up 12 percent YoY at 181 mn parcels but the realisations were lower 4 percent YoY (up 1 percent QoQ). It added, “Management reiterated that it has not changed pricing strategy and sequential improvement in realisations was driven by mix… India’s e-commerce penetration at just 7% vs 26% in US and 31% in China points to double-digit B2C growth continuing medium-term. Our estimates factor 15% medium-term CAGR in B2C industry growth and 19% for Delhivery with some share gains.”

The analysts believe that the fixed cost leverage should support the margin turnaround on a revenue CAGR of 23 percent over FY23-26E, with the company’s ability to pass on variable cost to customers and with their market positioning.