The Promise Of Scale, Operational Efficiencies: ICICI Securities Initiates Coverage


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Delhivery Ltd.’s business-to-consumer heavy business model has a potential profit pool of Rs 63 billion in India in our view (by FY26E).

Our base case assumes Delhivery to capture ~25% of the same. We see significant scope of operating leverage with global best practices in distribution, sorting as well as consolidation likely streamlining processes.

What helps us to take the leap of faith toward profitability is that the company captured ~90% of incremental third-party logistics e-commerce distribution market (FY19-22) – a rare feat in itself across industries.

We expect profit after tax of Rs 9.4/15.7 billion by FY25/26E. Management’s plan is to press for operational efficiencies and pass on the same to customers (partly), thereby meaningfully creating/capturing the incremental market.

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