Delhivery Targeted to Reach Rs 534 by Prabhudas Lilladher: Analysts' Recommendation

Delhivery Sees Improved Outlook, Despite Adjusted EBITDA Estimates Cut

Delhivery's recent operating performance has exceeded expectations, with the company reporting an EBITDA margin of 7.5% in the last quarter. This is an improvement over the previous estimate of 6.7%. The company's better-than-expected performance can be attributed to healthy traction in its B2C and PTL divisions.

Delhivery's investment in new businesses, including on-demand intra-city logistics, international air-economy, and financial services, is expected to reach INR1,300-1,600 million in FY27E. As a result, Prabhudas Lilladher's research report has cut its adjusted EBITDA estimates by 5%. Despite this, the company's financial performance has shown significant improvement. In FY26, Delhivery turned free cash flow (FCFF) positive, thanks to a better scale advantage, improved working capital cycle, and reduced capital expenditure intensity.

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The B2C segment has registered healthy performance since the last two quarters, despite being affected by curbs on insourcing by a large marketplace platform. On the other hand, the PTL division has seen an improvement in service EBITDA margin due to rising utilization.

Looking ahead, Prabhudas Lilladher expects Delhivery to see sales growth of 17% over the next two years, with EBITDA margins of 8.9% and 10.2% in FY27E and FY28E, respectively. The company trades at 47x and 31x its FY27E and FY28E pre-IND AS EBITDA estimates, respectively. As a result, the research firm has retained its BUY rating with a target price of INR534 (35x FY28E EBITDA).