You missed Delhivery’s latest earnings beat, and your portfolio paid the price.
Key Takeaways
- Revenue grew 18% YoY to INR 28 billion, matching consensus.
- EBITDA doubled to INR 2.1 billion, delivering a 7.4% margin – 310bps above last year.
- Adjusted PAT (APAT) reached INR 670 million, 9% ahead of estimates; normalized APAT climbs to INR 1.1 billion after integration costs.
- Motilal Oswal forecasts 14%/44%/54% CAGR in revenue/EBITDA/APAT through FY28 and lifts the DCF target price to INR 580.
- The logistics sector is in a secular growth phase; peers like Tata and Adani are repositioning, making Delhivery a standout play.
Why Delhivery’s Margin Expansion Beats Sector Trends
Delhivery’s EBITDA margin of 7.4% represents a 310‑basis‑point improvement YoY and a 470‑basis‑point lift QoQ. The margin uptick is not a one‑off; it reflects higher network utilization, better price‑mix from premium services, and economies of scale after the E‑com Express integration. In a sector where average logistics margins hover around 5‑6%, Delhivery is carving out a premium positioning. The improvement also signals that cost‑to‑serve is falling faster than revenue is rising – a classic hallmark of operating leverage.
Delhivery vs. Competitors: How Tata and Adani React
While Delhivery rides a wave of margin expansion, Tata Logistics has been busy consolidating its B2B freight business, targeting a 5% margin by FY28. Adani Logistics, on the other hand, is pursuing a high‑growth, low‑margin model, betting on volume over profitability. The divergent strategies mean Delhivery’s earnings growth can outpace the broader logistics index, offering investors a relative value edge. Moreover, Delhivery’s technology‑first approach—real‑time tracking, AI‑driven route optimization, and a proprietary fulfillment platform—creates defensible moats that are harder for traditional asset‑heavy peers to replicate quickly.
Historical Parallel: What 2018 Logistics Turnaround Taught Us
In 2018, the Indian logistics space witnessed a similar inflection when Blue Dart revamped its network and achieved a margin jump from 3% to 6% within two years. Stock price appreciation followed, delivering a 120% upside for investors who entered at the trough. The catalyst then was a combination of e‑commerce boom, improved last‑mile capabilities, and tighter cost control—all elements we see echoing in Delhivery’s 2026 results. History suggests that once margin momentum starts, it can be self‑reinforcing as larger players are forced to match pricing and service standards.
Technical Breakdown: Decoding EBITDA, APAT, and DCF Valuations
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a cash‑flow proxy that strips out financing and accounting decisions, letting analysts focus on core operating performance. A doubling of EBITDA while revenue grew 18% indicates strong operating leverage.
APAT (Adjusted Profit After Tax) removes one‑time items—here, the integration costs of E‑com Express—to give a cleaner view of sustainable earnings. The adjusted APAT of INR 1.1 billion suggests the “true” bottom‑line is far healthier than the headline figure.
The DCF (Discounted Cash Flow) model used by Motilal Oswal projects cash flows out to FY28, discounts them at a weighted average cost of capital (WACC) of roughly 9%, and arrives at a target price of INR 580, up from the prior INR 450. The upside potential is therefore about 30% from current levels.
Impact of Delhivery’s Growth on Your Portfolio
For investors holding broader exposure to Indian equities, Delhivery offers a concentrated bet on the logistics tailwind. With e‑commerce projected to reach INR 12 trillion by FY28, a 14% revenue CAGR translates to a market‑share capture that could lift the company’s top line to over INR 70 billion. The compounding effect of EBITDA margin expansion would push operating cash flow into a regime that can fund organic expansion without dilutive equity raises.
Investor Playbook: Bull vs. Bear Cases
Bull Case
- Continued e‑commerce growth fuels top‑line acceleration beyond 14% CAGR.
- Further network rationalization pushes EBITDA margins past 9% by FY28.
- Strategic partnerships with retailers lock in long‑term contracts, stabilizing cash flows.
- DCF assumptions hold, delivering a price target of INR 580+ and a 30‑40% upside.
Bear Case
- Integration hiccups with E‑com Express bleed costs, eroding margin momentum.
- Fuel price volatility and labor shortages compress operating margins.
- Competitive pricing pressure from Tata and Adani forces margin contraction.
- Regulatory changes on pricing or data privacy increase compliance costs, narrowing cash‑flow generation.
Bottom line: If you believe the logistics sector’s secular tailwinds are durable and Delhivery can keep translating scale into margin expansion, the stock presents a compelling risk‑adjusted entry at current levels. Conversely, watch for any slowdown in e‑commerce demand or cost‑inflation spikes that could temper the upside.