Jefferies downgrades Delhivery stock on insourcing concerns

Published 20/06/2025, 06:52
Jefferies downgrades Delhivery stock on insourcing concerns

Investing.com - Jefferies downgraded Delhivery (NSE:DELH) Ltd (NSE:DELHIVER) to Underperform from Buy on Friday, slashing its price target to INR315.00 from INR500.00 amid concerns about key customer insourcing.

The investment firm noted that Delhivery’s key customer revenue share, believed to be Meesho, remained flat year-over-year, implying 10% growth compared to the Express Parcel segment’s 5% growth, suggesting insourcing impacts have yet to fully materialize.

Jefferies projects a 57% FY25-28E EBITDA CAGR for Delhivery, driven by 12% Express Parcel sales CAGR, 19% Part Truckload sales CAGR, and 14% growth in Supply Chain sales, with respective margin targets of 18%, 12%, and 8% by FY28E.

The new price target is based on 20x June 2027 estimated EV/EBITDA, representing a significant reduction from the previous target and implying 14% potential downside in the base case scenario.

Jefferies identified potential upside risks including Meesho outsourcing and accelerated e-commerce growth, while its bull case scenario with stronger Express Parcel growth and improved margins would yield a price target of INR405.

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