Delhivery may be a key beneficiary of a potential pickup in e-commerce growth as income tax cuts take effect from FY26. This is not being recognised at present and could positively surprise investors. We, therefore, maintain target price of Rs 500 and re-iterate Buy.
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ICICI Securities Report
Service level Ebitda margin for Delhivery Ltd. express parcel segment was ~500 basis points lower than what was realised in Q3 FY24, despite a similar top line due to a one-off surge in intracity vehicle rental expenses (~Rs 540 million differential). Partial-truckload revenue declined 3% QoQ (+22% YoY) in Q3 FY25 given adverse seasonality; however, management remains confident of sustained growth next year.
We believe Delhivery is a compelling buy at current valuation, given limited downside post the recent stock price correction. Also, in our view, Delhivery may be a key beneficiary of a potential pickup in e-commerce growth as income tax cuts take effect from FY26.
This is not being recognised at present and could positively surprise investors. We, therefore, maintain target price of Rs 500 and re-iterate Buy.
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