ICICI Securities has kept its 'BUY' rating on logistics player Delhivery with a target price of Rs 600. While revenue climbed 28% to Rs 2,931 crore in Q1 FY27, profits dropped 65% due to higher operating costs. The brokerage highlights strong parcel volume growth as a key driver, though investors are keeping a close watch on margin recovery as the company integrates its recent acquisitions.
ICICI Securities has reiterated its 'BUY' recommendation for logistics firm Delhivery, setting a target price of Rs 600. This stance comes as the company navigates a period of high growth and rising operational costs. In the first quarter of the 2027 fiscal year, Delhivery reported revenue of Rs 2,931 crore, which marks a strong 28% increase compared to the same period last year. However, the path to profitability remains a key area of discussion for market participants.
The company's net profit saw a significant decline of 65% year-on-year, falling to Rs 32 crore from Rs 91 crore in the previous year. This drop in profit was largely driven by pressure on profit margins, caused by an increase in fuel and manpower costs, alongside the expenses related to integrating Ecom Express into its operations. Despite this, the brokerage remains positive due to the company's ability to scale its core business operations. Express parcel volumes grew by 55% to 322 million shipments in the first quarter, suggesting that the company is successfully gaining market share from other logistics providers.
Looking ahead, the company has reaffirmed its EBITDA margin targets, aiming for 16% to 18% in the express parcel segment and 15% to 15.5% in the Less-Than-Truckload or PTL segment. Management expects that margins will start to recover in the second half of the fiscal year as they pass on higher costs to customers and stabilize integration expenses. Analysts will be monitoring whether this recovery happens according to plan, as competitive pressure in the third-party logistics and quick commerce sectors remains intense.
Beyond the operational metrics, Delhivery has seen notable leadership changes. Vani Venkatesh has been elevated to the role of Deputy CEO, while the Chief Operating Officer, Ajith Pai, is set to step down by September 15, 2026. Additionally, the company has expanded its reach into new business lines. On August 3, 2026, Delhivery Financial Services received a registration from the Reserve Bank of India to operate as a non-banking financial company. This development marks a new strategic area for the company that investors may track for its future contribution to revenue.
For investors, the primary monitorables remain the pace of margin improvement and how effectively the company can control rising labor and fuel expenses. While volume growth continues to be a strong suit for the business, the ability to balance this growth with bottom-line profitability will determine the stock's performance in the coming quarters.