Delhivery Ltd. share price target

We believe Delhivery’s current valuations provide a great opportunity to BUY this high quality stock. The risk-reward skew at current market price is very attractive in our view (5.3:1).

Delhivery reported adjusted EBITDA loss of Rs2.17bn for Q1FY23, departing from the positive trend under the same parameter over the past two quarters.

Delhivery’s B2C-heavy business model has a potential profit pool of Rs 63bn 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.

Outlier growth prospects with profit round the corner

Issue Snapshot: Issue Open: May 11 May 13, 2022 Price Band: Rs. 462 487 (A discount of Rs.25 for all eligible employee) *Issue Size: Rs 5235.0 cr (Fresh issue 4000 cr + offer for sale of 1235 cr) Reservation for: QIB atleast 75% eq sh Non Institutional upto 15% eq sh ((including 1/3rd for applications between Rs.2 lakhs to Rs.10 lakhs)) Retail upto 10% eq sh Employee Reservation: aggregating upto Rs. 20 Cr Face Value: Rs 1 Book value: Rs 93.19 (Dec 31, 2021) Bid size: - 30 equity shares and in multiples thereof 100% Book built Issue Delhivery Limited - IPO Note

IPO Note