Motilal Oswal Recommends Buying Delhivery Ltd at Rs 570 Target Delhivery Ltd reported a 28% year-over-year (YoY) increase in revenue to INR29.3 billion in the first quarter of fiscal year 2027 (1QFY27), aligning with expectations. However, EBITDA declined 4.5% YoY to approximately INR1.4 billion, falling short of estimates by 27%. EBITDA margins dropped to 4.9%, a 160 basis point (bp) decline YoY and 260 bp decrease quarter-over-quarter (QoQ). The margin contraction was attributed to higher labor costs following minimum wage revisions in key states like Haryana, Karnataka, Uttar Pradesh, and Punjab, as well as reduced labor availability due to elections and a one-month delay in passing through higher fuel costs. The company’s adjusted profit after tax (APAT) stood at INR319 million, significantly lower than the INR911 million recorded in the same period of the previous fiscal year (1QFY26), reflecting a 46% shortfall against estimates. Core transportation segments, including Express Parcel and Part Truckload (PTL), showed robust volume growth. Express Parcel revenue rose 33% YoY to INR18.7 billion, driven by a 55% increase in shipments to 322 million parcels following the integration of Ecom Express. PTL revenue grew 25% YoY to INR6.3 billion, with tonnage increasing 18% YoY to 0.542 million tons. Service EBITDA margins for Express Parcel and PTL stood at 15.6% and 11.2%, respectively. Delhivery attributed its strong volume growth to strategic initiatives such as expanding market share with existing customers, attracting new clients across direct-to-consumer (D2C), small and medium enterprise (SME), and consumer segments, as well as industry consolidation. Despite near-term challenges, management remains optimistic about sustaining momentum in Express and PTL segments.#karnataka #uttar_pradesh #haryana #motilal_oswal #delhivery_ltd
