Buy Shadowfax Technologies; target of Rs 175: ICICI Securities

Buy

ICICI Securities research report on Shadowfax Technologies

Shadowfax is a key beneficiary of consolidation in India’s express parcel segment. Over the last year, it has emerged as the second largest player, gaining >1,000bps YoY market share. We estimate it held a volume market share of ~27-28% as of Dec’26. We believe Shadowfax is well positioned to deliver a revenue CAGR of 27% over FY26E-28E driven by further consolidation, client diversification and pin code expansion. Scale benefits are expected to support Adj. EBITDA margin expansion from 3.7% in FY26E to 5.6% in FY28E (56% CAGR over FY26E–28E).

Outlook

We initiate coverage on Shadowfax at BUY and a TP of INR 175, based on a three-stage DCF model, assuming a WACC of 12.5% (50bps above Delhivery given higher client concentration risk) and a terminal growth rate of 5%. This implies 25x one-year forward Adj. EV/EBITDA (FY28E).

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Shadowfax Technologies - 0503026 - icici