Delhivery gains from express consolidation, e-commerce volumes and margin expansion

Investment View and Valuation

Motilal Oswal Financial Services’ October 8, 2026 update on Delhivery retains a Buy rating. The broker’s DCF-based target price of Rs 510 implies 28 per cent upside from the report’s CMP of Rs 397.

The investment case is supported by express-segment consolidation, healthy e-commerce demand and improving profitability. The thesis depends on sustained e-commerce volumes, continued industry consolidation, PTL expansion and delivery of the projected margin gains.

Express Segment Growth and Consolidation

Delhivery’s Express segment reported 55 per cent year-on-year volume growth in Q1 FY27. Motilal Oswal expects momentum to continue in Q2 FY27, supported by e-commerce shipment growth and market-share gains following industry consolidation.

The broker believes Delhivery is well placed to capture incremental industry volumes because of its scale, diversified customer base and ability to process high-volume, cost-sensitive shipments. Delhivery’s largest customer accounted for 17.7 per cent of revenue in FY25 and 19.2 per cent in FY26, which Motilal Oswal contrasts with the higher customer concentration reported by Shadowfax.

Motilal Oswal attributes Shadowfax’s lower realisation partly to its greater exposure to Meesho, where logistics costs were about Rs 42 per shipment in Q1 FY27. The broker believes the Express market is consolidating around low-cost, high-volume models and high-value express offerings. It considers Delhivery comparatively advantaged versus the concentrated customer base of some competitors and the losses reported by Xpressbees.

Express and PTL Growth Outlook

Motilal Oswal forecasts a 14 per cent revenue CAGR for Delhivery’s Express business over FY26 to FY28, driven by e-commerce volumes and sector consolidation.

The Part Truckload, or PTL, segment is another growth driver. Organised participants handle less than 25 per cent of industry volumes, and the broker projects PTL revenue CAGR of 15 per cent over FY26 to FY28. Its assumptions are based on SME and retail expansion, better yields and greater adoption of value-added services.

Profitability and Operating Leverage

The Supply Chain Services segment is expected to scale profitably as Delhivery exits unprofitable contracts. Motilal Oswal also cites warehousing formalisation, GST-led network redesign and demand for integrated multi-location offerings such as the Prime service.

The broker expects company EBITDA margin to increase to 8.4 per cent in FY28E from 6.1 per cent in FY26, supported by operating leverage, higher asset utilisation and technology integration.

• Management expects PTL service EBITDA margin to reach 16 to 18 per cent over the next two to three years from about 13.4 per cent in Q4 FY26.
• Management expects Express Parcel service EBITDA margin to sustain at 18 per cent, compared with 18.8 per cent in Q4 FY26, or improve through network optimisation.

Financial Outlook and Capital Allocation

Motilal Oswal estimates FY26 to FY28 sales, EBITDA and adjusted PAT CAGR of 15 per cent, 35 per cent and 82 per cent, respectively.

The broker expects steady-state capex to decline to about 4 to 5 per cent of revenue by FY28 as the major network buildout nears completion. It considers Delhivery’s negligible debt a source of flexibility for strategic capex and acquisitions.