Delhivery Gets Target Price Cut From Jefferies On E-Commerce Growth Concerns, Volume Challenges

Jefferies has cut its target price for Delhivery to Rs 515 from Rs 690, citing weaker e-commerce growth projections. The brokerage retained its 'buy' rating on the stock, with the new target indicating a potential upside of 56% from the previous close.  

The revision followed Delhivery’s second-quarter results for the financial year 2025, released on Thursday. The logistics service provider reported positive Ebitda due to tight cost control, despite the B2C volumes. It clocked an adjusted Ebitda of Rs 46.3 crore, significantly beating Jefferies’ estimate of a Rs 1.9 crore loss.

Delhivery's net profit for the July-September quarter dropped 81% to Rs 10.2 crore from Rs 54.4 crore in the preceding quarter.  

• Revenue up 0.8% to Rs 2,189.7 crore versus Rs 2,172.3 crore.

• Ebitda down 41% to Rs 57.3 crore versus Rs 97.1 crore.

• Margin narrows 190 basis points to 2.6% versus 4.5%.

• Net profit down 81% to Rs 10.2 crore versus Rs 54.4 crore.

The company attributed its performance to tight cost control measures and indicated that cost efficiency will remain a focus, especially if B2C volumes continue to grow below 10%.  

Jefferies flagged weak e-commerce growth as a concern, with Delhivery’s B2C volumes rising just 2% YoY in the quarter. The brokerage also reduced its FY25-27 revenue estimates for the company by 5-10%, reflecting ongoing industry-wide volume challenges.  

Delhivery’s management remains optimistic about the medium term, highlighting initiatives such as dark warehouses for e-commerce players and a sustained recovery in festive season volumes, which were 25% higher in October compared to pre-festive levels.  

Jefferies adjusted its valuation to 3 times enterprise value-to-sales for the revised target price. However, risks include slower-than-expected B2C volume growth and a prolonged industry slowdown, the note added.

Delhivery stock rose as much as 4.37% during the day to Rs 345 apiece, paring its losses after falling 1.19% on the NSE. It was trading 0.44% higher at Rs 332 apiece, compared to a 0.22% decline in the benchmark Nifty 50 as of 10:12 a.m. 

It has fallen 16.71% in the last 12 months and 14.73% on a year-to-date basis. Total traded volume so far in the day stood at 6.9 times its 30-day average. The relative strength index was at 21.52.

Nineteen of the 23 analysts tracking Delhivery have a 'buy' rating on the stock and four recommend a 'hold', according to Bloomberg data. The average of 12-month analysts' consensus price target implies a potential upside of 37.9%.