Delhivery Limited, one of India’s leading logistics and supply chain companies, operates across express parcel, part-truckload, and warehousing segments. The company’s diversified logistics network and digital integration have positioned it as a preferred partner for e-commerce and D2C businesses. Despite facing margin pressures over the past few quarters, Delhivery’s operational efficiency and automation-driven model have started yielding visible improvements.

According to Kotak’s analysis, the company’s steady growth in express parcel volumes and normalization in truckload utilization are early signs of recovery that warrant a more positive rating outlook.

Kotak Institutional Equities believes that Delhivery’s fundamentals are gradually strengthening. The brokerage highlighted three major reasons for the rating upgrade:

• 📈 Margin Improvement: Cost rationalization efforts, including network optimization and technology-driven route planning, are expected to lift margins over the next two quarters.
• 🚚 Volume Recovery: Rising e-commerce penetration, combined with festive season demand, is likely to accelerate parcel and freight movement.
• 💡 Scale Benefits: Operating leverage is expected to enhance as the company’s network utilization improves, leading to sustained profitability growth.

Delhivery reported steady quarter-on-quarter growth in shipment volumes, with clear indications of operating leverage beginning to play out. The brokerage expects revenue CAGR of around 16–18% over FY25–FY27, supported by rising logistics demand from consumer and industrial clients.

The revised target price of ₹565 (from ₹550) implies a forward EV/EBITDA multiple expansion based on improved profitability visibility and sector re-rating. Kotak notes that Delhivery’s strong cash position and investments in automation will continue to be key growth enablers.

India’s logistics sector is entering a structural growth phase, supported by the boom in e-commerce, manufacturing expansion, and government infrastructure spending. Kotak expects organized logistics players like Delhivery to capture a larger market share as supply chains become more integrated and automated.

Furthermore, sustained policy support such as Gati Shakti and digital freight mapping is expected to reduce bottlenecks, improving asset utilization for logistics firms across the board.

• ⚠️ Intensifying competition in the logistics space may limit margin expansion in the medium term.
• 💰 Slower-than-expected recovery in e-commerce volumes could delay profitability milestones.
• 📉 Rising fuel costs or disruptions in freight availability could impact short-term operating margins.

Despite these risks, Kotak’s long-term conviction remains intact, given Delhivery’s proven execution capabilities and its technology-led cost advantage over smaller peers.