Delhivery Share Price Surges After Motilal Oswal’s Bullish Stance; Check Revised Target Price

Delhivery Share Price Today: Shares of logistic firm, Delhivery, surged on Wednesday after Motilal Oswal Financial Services brokerage initiated a higher price target for the stock. The company is well-positioned to take the advantage of its express parcel delivery service in the coming months, according to brokerage.

Delhivery shares were trading 1.42% higher at Rs 414.9 per share on BSE on Monday at 10:35 am with a market capitalisation of Rs 30,963.30 crore. The stock had touched an intraday high mark of Rs 418.7 per share today.

Delhivery Growth Outlook

The logistics firm is likely to strengthen its position in the industry and achieve a 14% revenue CAGR. The company is expected to see strong revenue growth and improved cost structure. The company is well-positioned to capitalise the opportunities in the sector amid strong industry tailwinds and infrastructure, according to MOFL.

"We expect Delhivery to strengthen its market dominance and achieve a 14% revenue CAGR, driven by 18% revenue CAGR in PTL and 10% CAGR in the express parcel business. Strong revenue growth, coupled with improved cost structure, is expected to drive an EBITDA/APAT CAGR of 36/52% over FY25-28. With improved earnings, we expect RoE to improve to 5.6% in FY28 from 1.8% in FY25. With a strong B/S and negligible debt, Delhivery would comfortably be able to fund its capex requirements over the next few years," stated MOFL in its report.

MOFL's Bullish Stance on Delhivery's Express Business

Delhivery's express business linked to faster commerce marketplaces, D2C brands, omnichannel retailers, small and medium industries, large enterprises and consumers, has expanded significantly over the past few years.

The company's share in the express logistics segment has grown exponentially over the past 10 years. "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 PTL express market, which will lead to a strong balance of growth and profitability," MOFL added in its report.

Delhivery Share Price Target

Delhivery share price value is likely to see an upside of more than 10% in the coming months, as the company is focusing on expanding its business with acquisitions and tie-ups. The brokerage has fixed a target price of Rs 480 per share for Delhivery shares.

"We initiate coverage on Delhivery with a BUY rating. We value the company using DCF, arriving at a TP of INR480 based on a WACC of 12% and terminal growth rate of 5% (implied EV/EBITDA of 36x on FY28). We believe Delhivery's focus on strategic acquisitions and providing integrated solutions will further strengthen its growth prospects," stated MOFL in its report.

What Are The Key Risks In Delhivery Growth?

Despite Delhivery's positive outlook against the backdrop of growing user base, business expansion, and scaling up of new e-commerce opportunities, Delhivery is prone to slower growth momentum in the e-commerce segment and slower-than-expected penetration in the B2B express market.

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