Delhivery, a leading player in the e-commerce logistics industry, has been making waves in the market with its consistent performance. Despite a modest 3 percent increase in its share price over the past year, global brokerage firm HSBC believes that there is immense potential for growth, projecting a significant 20 percent upside. In a recent report, HSBC reaffirmed its buy rating on Delhivery, maintaining a target price of ₹500.
“We are bullish on Delhivery due to its strong market position and sustainable economics in the high-growth e-commerce logistics sector. The company’s dominance in India’s thriving e-commerce logistics market is a key driver of our positive outlook. With a trading multiple of 33 times FY27E PE and a target price that signifies nearly 40 times PE, we see great value in investing in Delhivery,” stated HSBC.
What sets Delhivery apart according to HSBC?
HSBC’s analysis compared Delhivery with Ecom Express, the other major player in India’s e-commerce logistics landscape. While Ecom Express is not publicly listed, HSBC drew insights from its recently filed Draft Red Herring Prospectus (DRHP) for comparison.
HSBC emphasized Delhivery’s superior cost economics, particularly in the express parcel segment, which contributes significantly to its revenue stream. Despite initial losses in certain early-stage ventures, Delhivery’s profitability in the parcel business remains robust compared to its competitors.
Notably, Delhivery’s business diversification across various logistics services and clientele sets it apart from Ecom Express, which primarily focuses on the e-commerce express market.
“Delhivery’s Express Parcel business has outperformed Ecom Express, with higher revenue and superior EBITDA margins. The consistent growth in Delhivery’s parcel revenue over the past five years showcases its strong market position and operational efficiency,” highlighted HSBC.
In the latest financial update, Delhivery reported a net profit of ₹54.35 crore for the quarter ending June 2024-25, with a 12.56 percent increase in revenue from operations compared to the same period last year, reflecting the company’s growth trajectory.
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