On the Cusp of FCF Positivity

Research evidence excerpt

On the Cusp of FCF Positivity

India | Transport & Logistics

Delhivery EquityMayResearch17, 2026

TARGET | ESTIMATE CHANGEOn the Cusp of FCF Positivity

Delhivery’s Mar-26Q EBITDA at Rs2.1 bn (+80% YoY) was inline with JEFe. RATING BUY

Delhivery’s key customer, Meesho, in its Mar-26Q concall indicated lower PRICE INR475.70^

insourcing, a key positive for its Express Parcel (EP) business (64% of PRICE TARGET | % TO PT INR550 (INR525) | +16%

FY26 sales). Part Truck Load (PTL) volume growth and margin expansion 52W HIGH-LOW INR489.95 - INR320.00

remain strong. Recovery in Supply Chain Services (SCS) growth is a new FLOAT (%) | ADV MM (USD) 74.0% | 1,658.10

focus area. The potential volume/cost impacts from the Middle East MARKET CAP INR381.1B | $4.0B

tensions are a key monitorable. TICKER DELHIVER IN

^Prior trading day's closing price unless otherwise

noted.

4% QoQ EP volume growth vs. the usual QoQ decline in 4Q: Lower insourcing from Meesho

drove volume growth, in our view. Strong volume growth and network utilization drove a

290 bps YoY margin expansion to 18.8%, despite 15% YoY drop in realisations. We believe FY (Mar) CHANGE TO JEFe JEF vs CONS

volumetric weight/customer mix impacted realisations. While Amazon’s foray into 3PL was 2027 2028 2027 2028

a key discussion area during the call, we believe, higher volume contribution from Meesho to REV +3% +6% +6% +12%

3PL acts as an entry barrier for logistics arms of marketplaces. EPS -17% +5% -1% +29%

SCS growth recovery a new focus area: PTL volumes rose 20% YoY and margins rose 260 2027 (INR) Q1 Q2 Q3 Q4 FY

bps YoY to 13.4% vs. 16-18% medium-term margin target. Management on the call highlighted EPS -- -- -- -- 7.94

that the company has a pass-through clause in its contracts for any rise in fuel prices. SCS PREV 9.56