May 24, 2024

ICICI Securities analysis report on Delhivery

We met Mr Amit Agarwal, Chief Monetary Officer, Delhivery. Takeaways: 1) Focus stays on economical pricing and buyer expertise to drive revenue share growth. 2) H1FY24 progress was decrease than firm’s expectations; H2FY24 is off to a greater begin and it re-iterated ~15% YoY income progress steering in categorical parcel. 3) Rising proportion of bigger vehicles helped Delhivery obtain ‘lowest in business’ line haul expense and the differential ought to increase as they add extra such vehicles to the fleet. 4) They’ve gained share in D2C area with multi-pronged initiatives – tech choices, velocity of supply and integrating fulfilment stack. 5) Integration of SpotOn took longer-than-envisaged, however no challenge with the standard of asset acquired. Keep BUY with a TP of INR 500.

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Outlook

We worth Delhivery utilizing time-discounted ahead EV/EBITDA multiples. We low cost EV, calculated at 20x FY26E EV/EBITDA (at 15% low cost charge), to reach at our value goal of INR 500. Key dangers: 1) Pricing strain within the categorical parcel or PTL enterprise. 2) World headwinds worsening medium-term progress visibility.

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Delhivery – 03 – 01 – 2024 – isc