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Delhivery’s Q1FY26 print was strong on the operational front, with EBITDAM continuing to expand as revenue from core segments (B2C/PTL) saw doubledigit growth (10%/17% YoY, respectively). FY26 outlook for the B2C segment appears robust, as benefits of the consolidation endure in July too, per management. While other segments (SCS, FTL, CBS) saw a muted quarter (for for various reasons), the PTL segment continues to grow from strength to strength owing to Delhivery’s reliable network. Baking in the Ecom acquisition from Q2, we increase overall revenue by 5%/7% for FY26E/27E, respectively, as we expect the B2C segment to deliver 19% revenue CAGR over FY25-28E. While integration costs would impact profitability in FY26, the management target of reaching 17-18% service EBITDAM in FY26 (B2C) should bode well for the margin trajectory ahead. We maintain BUY on the stock and revise up Jun26E TP of Rs450 (by 10% from Rs410; DCF methodology), as the company’s market leadership position should allow it to tide over industry headwinds like insourcing. Additionally, Delhivery’s foray into new products like rapid commerce and on-demand intracity trucking could create adjacent growth vectors in the future as well as further drive revenue diversification.

Robust margin performance continues Revenue grew 6% YoY to Rs23bn, driven by the PTL/Express parcel segments (up 17%/10% YoY, respectively) in Q1FY26. Express business growth of 10% YoY was driven by parcel volume growth of 14% YoY, while being partially offset by the 3% YoY decline in realization per parcel. PTL revenue was up 17% YoY, continuing its growth trajectory, as volumes grew 15% YoY along with realization-per-ton increasing 2% YoY. EBITDA margins came in at 6.5% (at a 4.7% beat on our estimate), as COGS increased a mere 4% YoY and other expenses fell 5% YoY. Other income inched up 18% YoY (aided by MTM gains). PAT grew 67% YoY to Rs910mn on the back of improved operating profitability.

Outlook and risks While risks of further insourcing by Meesho persist, industry consolidation should result in prudent pricing discipline among B2C operators. As such, per the management, the volatile operating environment results in a flight toward quality players, allowing them to bolster market share gains. Amid challenges in the B2C industry persisting in the short term, Delhivery’s ability to capture adjacent opportunities in logistics sets it apart from competition. With a robust outlook for the PTL segment, Delhivery’s foray in new products, though at a nascent stage at present, could translate into substantial revenue drivers, in our view. Post integration costs related to the Ecom acquisition in FY26, we believe benefits of operating an integrated network should aid the long-term margin trajectory; maintain BUY. Key risks: Slowdown in e-commerce due to quick commerce; increased insourcing by marketplaces, pricing pressures in a fragmented market.

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