Motilal Oswal has maintained a positive view on Delhivery, setting a price target of ₹580. The brokerage highlighted a 73% year-over-year volume growth in the express segment during Q4 FY26. Investors are now focusing on the company's turnaround in the Less-Than-Truckload (PTL) business, where margins have improved significantly.
What Happened
Brokerage firm Motilal Oswal has maintained a positive outlook on Delhivery, reiterating its rating and setting a price target of ₹580. The report comes after the company reported strong volume growth of 73% year-over-year in its express parcel segment for the fourth quarter of the fiscal year 2026. Despite a challenging global environment and the typical seasonal slowdowns, the company demonstrated resilience in its operations, driven by sustained demand from e-commerce platforms and increased outsourcing by customers.
The PTL Business Turnaround
The most significant observation from the report is the structural change in Delhivery’s Less-Than-Truckload (PTL) segment. Previously, this segment struggled with profitability, but it has now shown a marked improvement. The service EBITDA margins for the PTL business have shifted from a negative 8.5% in the first quarter of fiscal year 2024 to a positive 13.4% in the fourth quarter of fiscal year 2026.
This shift is largely attributed to a change in strategy. The company has moved toward serving higher-value small and medium-sized enterprise (SME) and retail clients. Additionally, Delhivery has rationalized less profitable contracts and enforced stricter pricing discipline. By strengthening its sales team and focusing on better yields per customer, the company has successfully improved its profitability in this segment.
Business Risks And Competitive Landscape
While the brokerage report is optimistic, the Indian logistics sector remains highly competitive. Delhivery competes with established players like Blue Dart and TCI Express, as well as several smaller, regional logistics providers. Price wars and the high cost of fuel are constant pressures that can impact the margins of logistics companies.
Furthermore, Delhivery’s revenue growth is closely tied to the e-commerce sector. A slowdown in consumer spending on online platforms could directly affect the company's express parcel volumes. Additionally, the company is operating in a capital-intensive industry where maintaining a pan-India network requires consistent spending on technology and infrastructure, which can impact cash flow if volume growth does not keep pace with expansion costs.
Growth Projections
Looking at the long-term potential, Motilal Oswal expects Delhivery to maintain a strong growth trajectory. The brokerage projects a compound annual growth rate (CAGR) of 13% in sales, 33% in EBITDA, and 83% in adjusted profit after tax (APAT) for the period between fiscal years 2026 and 2028. These projections assume the company can successfully scale its operations and maintain its current pricing discipline.
What Investors Should Track Next
The key monitorable for shareholders is the consistency of the PTL segment's margin expansion. Investors will want to see if the company can maintain these margins while continuing to gain market share. Furthermore, observing how the company manages operational costs in an environment where fuel and labor prices can fluctuate will be crucial. Future management commentary regarding e-commerce demand trends and the successful integration of their newer, higher-yielding customer base will be important updates to watch.