Delhivery Share Price Target at Rs 480: Motilal Oswal Research
Delhivery, India’s preeminent third-party logistics (3PL) provider, has received a bullish endorsement from Motilal Oswal, which has initiated coverage with a BUY recommendation. The research house values Delhivery at a target price of Rs 480, implying a 17% upside from current levels. The report highlights Delhivery’s robust growth trajectory, its dominance in express logistics, and a strategic pivot towards high-margin segments. Investors are advised to closely watch the company’s margin expansion, market share gains, and integration of recent acquisitions, while being mindful of sectoral risks and competitive pressures.
Summary of Motilal Oswal’s Investment Thesis
Motilal Oswal’s research underscores Delhivery’s transformation into the largest and fastest-growing 3PL logistics operator in India, with an expansive reach across 19,000 pin codes and a diversified service portfolio. The company has achieved a remarkable turnaround, shifting from operating losses to EBITDA profitability, and is now poised for a new phase of margin expansion and market dominance. The report projects a 14% revenue CAGR for FY25–28, driven by both the express parcel and part truck load (PTL) segments, and expects EBITDA margins to climb to 7% by FY28. The target price of Rs 480 is based on a DCF valuation with a WACC of 12% and a terminal growth rate of 5%.
Key Investment Highlights
1. Market Leadership and Scale
Delhivery commands over 20% market share in India’s express logistics space, serving 44,000 customers and handling more than 2.8 billion shipments since inception. The company’s vast network, including 111 gateways and 45 automated sort centers, is nearly impossible to replicate, giving it a formidable competitive moat.
2. Revenue and Profitability Growth
Between FY19 and FY25, Delhivery posted a 32% revenue CAGR, with EBITDA swinging from a loss of Rs 16 billion in FY19 to a positive Rs 3.7 billion in FY25. Looking ahead, Motilal Oswal forecasts a 14% revenue CAGR for FY25–28, with EBITDA and APAT (Adjusted PAT) CAGRs of 36% and 52% respectively.
3. Segmental Diversification
Delhivery’s revenue mix is led by express parcels (60% of FY25 revenue), followed by PTL (21%), supply chain services (7%), truck load (10%), and cross-border logistics (2%). The company’s recent acquisition of Ecom Express for Rs 14.1 billion is expected to further consolidate its leadership in the express segment and unlock operational synergies.
Financial Overview and Stock Levels
4. Financial Projections and Valuation
Motilal Oswal’s DCF-based valuation yields a target price of Rs 480 per share, with key financial metrics as follows:
| Year | Revenue (Rs bn) | EBITDA (Rs bn) | EBITDA Margin (%) | EPS (Rs) | RoE (%) |
|---|---|---|---|---|---|
| FY25 | 89.3 | 3.8 | 4.2 | 2.2 | 1.8 |
| FY26E | 102.1 | 5.6 | 5.5 | 3.8 | 3.0 |
| FY27E | 116.9 | 7.1 | 6.1 | 5.5 | 4.1 |
| FY28E | 133.5 | 9.4 | 7.0 | 7.9 | 5.6 |
Current Market Price (CMP): Rs 409
Target Price (TP): Rs 480
Upside Potential: +17%
Operational Excellence and Technology Edge
5. Asset-Light, Tech-Driven Model
Delhivery’s asset-light strategy, with negligible owned fleet and primarily leased infrastructure, enables rapid scalability and cost flexibility. The company’s proprietary logistics operating system and investment in automation (45 sortation centers, 5.4 million shipments/day capacity) drive superior productivity and real-time decision-making.
6. Data Intelligence and Automation
Delhivery leverages advanced data analytics, AI, and machine learning to optimize network design, route planning, and load aggregation. This technological edge supports operational efficiency, cost reduction, and enhanced customer experience.
Strategic Acquisitions and Market Consolidation
7. Ecom Express Acquisition
The Rs 14.1 billion acquisition of Ecom Express, though a distress sale for the latter, is poised to strengthen Delhivery’s rural reach and operational scale. Integration is expected to be smooth given the overlap in customer base and processes, with long-term benefits including lower per-shipment costs and improved service quality.
8. PTL and Warehousing Expansion
Delhivery is the third-largest PTL player in India, capturing around 10% of the organized PTL market. The company’s focus on scaling PTL and warehousing services is set to drive revenue and margin accretion, capitalizing on the sector’s ongoing formalization.
Industry Tailwinds and Market Opportunity
9. Sectoral Growth Drivers
India’s logistics market is forecast to grow at a 9% CAGR to reach USD 242 billion by FY28, with express logistics expected to outpace at 14% CAGR. Rising e-commerce penetration, regulatory reforms, and technology adoption are shifting the balance in favor of organized players like Delhivery.
10. Peer Comparison
Delhivery’s valuation multiples are elevated due to its high growth and reinvestment phase, but its scale and margin trajectory compare favorably to domestic peers such as Blue Dart, VRL Logistics, Mahindra Logistics, and TCI Express.
Risks and Watchpoints
11. Key Risks
Heavy reliance on e-commerce: About 60% of revenue is linked to e-commerce, exposing Delhivery to sectoral slowdowns.
Vendor and partner dependency: The company’s asset-light model depends on third-party fleet and infrastructure providers.
Intensifying competition: Both organized and unorganized players could pressure market share and margins.
Lease cost escalation: Rising rental and vehicle lease expenses could impact profitability.
Investment Outlook and Levels
Motilal Oswal’s BUY call is predicated on Delhivery’s market leadership, scalable platform, and margin expansion potential. The stock is recommended for investors with a medium- to long-term horizon, with an entry zone around Rs 409 and a target of Rs 480. Key support levels to watch are Rs 370 (medium-term support) and Rs 448 (recent high). Upside is contingent on successful integration of acquisitions, sustained volume growth, and continued margin improvement. Investors should monitor quarterly results for evidence of execution and sectoral shifts.
