Buy Delhivery; target of Rs 510: Emkay Global Financial

Emkay Global Financial' research report on Delhivery

Delhivery’s Q2FY26 results (excluding Ecom) were in line with our revenue/EBITDA estimates. With network investments in core transportation businesses (for the festive season) behind us, seasonality would aid peak profitability in H2FY26, coupled with the lower-than-anticipated integration cost (~Rs2bn vs Rs3bn earlier) boosting PAT in FY26, in our view. Per the management, B2C volumes grew 15% YoY (organically), suggesting a pause in insourcing by Meesho, while PTL continued to gain market share amid a tepid environment (revenue growth of 15% YoY). We nudge up EBITDA estimates for FY27/28 by 6%/8%, respectively, as we anticipate benefits of consolidation in the B2C industry and sustained market share gains in PTL, improving the margin trajectory.

Outlook

We maintain BUY and revise up our Sep-26E TP to Rs510 (by 13%, from Rs450; DCF methodology). Additionally, Delhivery’s foray into new products like rapid commerce, Delhivery Direct, and financial services could create adjacent growth vectors in the future and further drive revenue diversification.