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We expect a mixed quarter for logistics companies under our coverage, owing to seasonality and continued competitive intensity faced by organized players. Divergence between the trajectory of GST e-way bill volumes and our logistics universe continues, with e-way bills having grown 20% YoY in Q1FY26. For B2B operators, we expect volume growth of 14%/11% YoY for Delhivery’s PTL/Blue Dart Express, while volumes are likely to decline 12% for VRL and stay flat YoY for TCI Express. We model in Delhivery’s B2C revenue growth at 12% YoY, as we believe the benefits of sector consolidation will more than offset the continued insourcing by Meesho. Regarding margin, VRL should see the strongest expansion (of 770bps YoY) among peers on price hikes taken in Q2FY25 as well as its strategy of relinquishing the low-margin business.

Delhivery (BUY; TP up 8% to Rs410)

We expect 10% YoY revenue growth, with the PTL and B2C express segments growing 18% and 12% YoY, respectively. We anticipate 12% growth in B2C express revenue after five consecutive quarters of a mid-single digit growth, on the back of sector consolidation following the Ecom Express acquisition. Margins should be flattish YoY, as incremental growth would be offset by network expansion and seasonality. Commentary on the B2C industry growth trajectory and the Ecom Express integration remain key observables. We nudge up our revenue by 3%/2% for FY26E/27E, respectively, factoring in the improved volume trajectory for the B2C segment. We retain BUY on the stock, while revising up Mar-26E TP by 8% to Rs410 (DCF methodology) from Rs380 earlier.

VRL Logistics (BUY; TP at Rs650)

We expect VRL’s realization to improve 18% YoY owing to price hike in Q2FY25; however, volume growth will remain weak for a second consecutive quarter (down 12% YoY) owing to the company’s strategy of relinquishing low-margin volumes in Q4FY25. Led by higher realizations, we build in gross margin expansion of ~850bps YoY, resulting in 70% YoY EBITDA growth and 3.4x YoY PAT growth. Commentary on the volume trajectory remains a key monitorable. We maintain BUY on the stock with unchanged Mar-26E TP of Rs650.

Blue Dart Express (ADD; TP up ~5% to Rs7,000)

We estimate volume growth of 11% YoY for Blue Dart Express, driven by the surface and B2C segments; blended realizations are likely to decline 1% YoY. Consol EBITDA margin is expected to be flattish, as higher share of the low margin surface business is offset by better utilizations of new freighters. We expect consol PAT growth at 18% YoY on the back of other income improving 12% YoY, while finance cost would decline 12% YoY. Factoring in the slightly better margin, we increase FY26E/27E PAT by 4%/7%, respectively; retain ADD; revise up TP by ~5% to Rs7,000 (DCF methodology).

TCI Express (REDUCE; TP raised 8% to Rs700)

We expect Q1 revenue to be flat YoY on continued sectoral headwinds and elevated competitive intensity. EBITDA margin is likely to continue sliding on account of inflationary pressure and lower network utilization, albeit improve sequentially. We expect Q1 to be a trough quarter, as company initiatives in new segments should arrest any volume decline ahead. We raise FY25E-28E EBITDA by 1-5% on improved network utilization; we await an improvement in the volume trajectory, to turn constructive on the stock (5% CAGR over FY25-28E). We maintain REDUCE, while revising up Mar-26E TP by 8% to Rs700 (DCF methodology) from Rs650 earlier.

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