09 Jul , 2025 By : Debdeep Gupta
Logistics player Ltd shares ran up two percent after domestic brokerage Motilal Oswal initiated coverage with a bullish outlook on Wednesday, July 9.
Motilal Oswal issued a 'buy' rating on Delhivery shares, with a target price of Rs 480 per share, indicating an upside potential of around 17 percent.
Since 2011, Delhivery has garnered a sizeable share of the express logistics market and has grown exponentially. The company initially focused on the express parcel business – the fastest-growing segment in the logistics industry – to capture growth. "Now it is aiming to grow materially in the high-margin part truck load (PTL) express market, which will lead to a strong balance of growth and profitability," said the brokerage.
Further, the brokerage noted that during FY19-25, Delhivery reported a 32 percent revenue CAGR, driven by the express parcel and PTL segments. During this period, the company turned EBITDA positive. According to Motilal Oswal, the turnaround was driven by economies of scale in the express parcel business and stabilization of the PTL business post-acquisition of Spoton.
Going ahead, Motilal Oswal expects Delhivery to strengthen its market dominance and achieve a 14 percent revenue CAGR, driven by 18 percent revenue CAGR in PTL and 10 percent CAGR in the express parcel business.
"Strong revenue growth, coupled with improved cost structure, is expected to drive an EBITDA/PAT CAGR of 36/52 percent over FY25-28. With improved earnings, we expect RoE to improve to 5.6 percent in FY28 from 1.8 percent in FY25. With a strong balance sheet and negligible debt, Delhivery would comfortably be able to fund its capex requirements over the next few years," added the brokerage.
At 10 a.m., shares of the firm were quoting Rs 416.85, up two percent on the NSE compared to the previous session's close.
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