Buy Delhivery; target of Rs 480: Motilal Oswal

Buy

Motilal Oswal's research report on Delhivery

Delhivery is India's leding 3PL logistics player, catering to a wide network of ~19,000 pincodes. Its service offerings include express parcels, part truck load (PTL), supply chain services, and others. Delhivery, which commeanced operations in 2011 as an express logistics player, has rapidly increased its presence in the PTL segment after the acquisition of Spoton Logistics in 2021. The company is India's premier logistics operator at present, with a market share of >20% in the express logistics space. With robust industry tailwinds and Delhivery's strong infrastructure in place, it is well placed to capitalize on the opportunity.

Outlook

We initiate coverage on Delhivery with a BUY rating. We value the company using DCF, arriving at a TP of INR480 based on a WACC of 12% and terminal growth rate of 5% (implied EV/EBITDA of 36x on FY28). We believe Delhivery’s focus on strategic acquisitions and providing integrated solutions will further strengthen its growth prospects.

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