Whalesbook
Delhivery: Boosting Efficiency, Driving Growth
Analysts are highlighting Delhivery Limited for its strategic initiatives in mid-mile logistics. A key focus is increasing asset utilization rates from the current ~80% on a deadweight basis. The company is concentrating on densifying lanes with lower utilization, especially those with a higher concentration of Express Parcel traffic. Significant capital expenditure on large facilities, including Lonad and Hoskote, has been completed, with no major gateway projects planned for the next few years. Capital expenditure is also limited for tractors, trailers, and sorters, some of which were acquired from Ecom Express.
Employee and vehicle costs are being managed to match utilization levels. The company's mesh network structure effectively handles most mid-mile transportation journeys without requiring intermediate stops. The goal is to minimize gateway inventory time, ideally to within four hours.
The growing importance of clients like Meesho is seen as positive for growth, even as hit rates normalize. Meesho's insourcing has decreased significantly over the past two quarters, fueling a robust year-over-year growth of over 60% in Express Parcel volumes in Q4FY26E. While current hit rates with Meesho may not be sustained indefinitely, analysts project a strong 23% compound annual growth rate (CAGR) in Express Parcel volumes for Delhivery over FY2026-28. This forecast assumes an 11% CAGR in volumes from clients other than Meesho. Factoring in this strong growth, Delhivery's fair value has been revised upwards to ₹590 from ₹570. The company's past losses are being used to lower its tax payments, which analysts estimate could boost Earnings Per Share (EPS) by 50% to 146%.
Fiem Industries: Shining in Automotive Lighting
Fiem Industries (FIEM) is attracting 'Buy' ratings due to its established position as a tier-1 manufacturer of automotive lighting and rearview mirrors, mainly serving two-wheeler original equipment manufacturers (OEMs). The company also provides sheet metal and plastic components to both two-wheeler and four-wheeler OEMs, with a presence in the aftermarket segment. The outlook for the two-wheeler industry remains positive through FY26-28E, supported by healthy retail demand after GST rationalization.
FIEM is expected to outpace industry growth driven by the rising adoption of LED lighting, the performance of its key clients, and scaling up revenue with new customers. LED lamps add two to three times more value per vehicle than halogen lamps. FIEM has seen its revenue share from automotive LED lighting increase from 51.7% in FY24 to 59.3% in FY25 and further to 63.5% in 9MFY26.
The company benefits from long-standing relationships with major clients including Honda Motorcycle and Scooter India, TVS Motors, Yamaha Motor India, and Suzuki Motorcycle. Hero MotoCorp has recently been added to its customer list, presenting potential for significant business expansion. Fiem Industries is also leveraging its LED lighting expertise and R&D capabilities to target the four-wheeler segment, a substantial growth opportunity.
Fiem maintains strong cash flows and a net cash position, funding investments in new technology and capacity. Its product portfolio is not tied to specific engine technologies, meaning the rise of electric vehicles (EVs) poses no threat. Current valuations are considered reasonable, with a price-to-earnings (PE) ratio of 22x on FY28E earnings.