ICICI Securities Initiates Coverage on Shadowfax Technologies, Sets Target Price of Rs 175

Shadowfax Technologies: A Key Beneficiary of Consolidation in India's Express Parcel Segment

Key Highlights

• Shadowfax has emerged as the second-largest player in India's express parcel segment, gaining over 1,000 bps YoY market share, with an estimated 27-28% volume market share as of December 2026.
• We forecast a revenue compound annual growth rate (CAGR) of 27% for Shadowfax over FY26E-28E, driven by further consolidation, client diversification, and pin code expansion.

Outlook and Valuation

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We initiate coverage on Shadowfax with a BUY recommendation and a target price (TP) of INR 175, based on a three-stage discounted cash flow (DCF) model. The model assumes a weighted average cost of capital (WACC) of 12.5%, 50 bps above Delhivery due to higher client concentration risk, and a terminal growth rate of 5%. This valuation implies a one-year forward adjusted enterprise value to earnings before interest, tax, depreciation, and amortization (Adj. EV/EBITDA) multiple of 25x in FY28E.

Financial Projections

• Revenue CAGR: 27% (FY26E-28E)
• Adjusted EBITDA margin expansion: from 3.7% in FY26E to 5.6% in FY28E (56% CAGR over FY26E-28E)