Target: ₹300
CMP: ₹471.80
Ecom Express (Ecom) acquisition may be a damp squib in the near term for Delhivery. Ecom had a 9 per cent market share (express) in FY25, implying that post-acquisition, if all of Ecom’s volume is retained, then Delhivery’s express volume could rise by 60 per cent. However, the combined express volume of Delhivery & Ecom in Q1-FY26 was 21 per cent below the FY25 level. Thus, Delhivery’s FY26F volume may rise by just 25-30 per cent (vs. FY25).
We are sceptical about the margin growth for Delhivery due to limited volume benefit, low operating leverage and the foray of Ekart & Amazon into 3PL cargo. In FY27F, we expect Delhivery’s PBT to be ₹160 crore lower when compared ex-Ecom.
We estimate 12 per cent service EBITDA margin in FY26F and a 50 bps p.a. rise over FY26F-28F. We expect 170bp/150bp/110bp rise y-o-y in adj. EBITDA margin (post-ESOP). Since March 2023, the median forward EV/sales ratio is 2.8x; it is now trading at 2.7x FY27F EV/ sales.
We have valued Delhivery using the DCF methodology, at an 11 per cent discount rate. Post FY28F, we factor in 14 per cent p.a. sales growth and a 130bp p.a. rise in the EBITDA margin.
We consider an 18x EV/ EBITDA exit multiple on FY31F EBITDA. Upside risk: Higher than expected margin
Published on September 2, 2025
