Delhivery Stock Surges on Analyst Upgrade: Motilal Oswal Sees Massive Upside Amid Strong Volume Growth and Cost Control

Delhivery Stock Surges on Analyst Upgrade: Motilal Oswal Sees Massive Upside Amid Strong Volume Growth and Cost Control​

Delhivery shares witnessed a strong rally on Monday, climbing nearly 3 percent after brokerage firm Motilal Oswal Financial Services (MOSL) projected significant upside for the stock. MOSL has maintained a 'Buy' rating on Delhivery, forecasting up to 26 percent potential growth based on the company's impressive volume acceleration and decisive cost management efforts.

The stock traded at an intraday high of Rs 473.95 per share on the NSE, reflecting positive market sentiment. Shares of the logistics firm have shown sustained upward momentum, registering gains for four consecutive sessions and accumulating more than 4 percent over that period. MOSL’s target price of Rs 580 implies this substantial upside when compared to Friday's closing value of Rs 461.10.

Growth Drivers Fuel Delhivery Rally​

Motilal Oswal pointed to robust operational metrics as the primary driver behind the stock appreciation. Delhivery's Express segment registered a powerful 73 percent year-on-year volume growth during the fourth quarter of FY26. This impressive performance was achieved despite navigating a challenging operating environment, including the ongoing West Asia crisis and typical post-festive moderation.

The brokerage attributed this vigorous expansion to healthy consumption-driven demand within the market. Furthermore, high levels of outsourcing by customers and sustained momentum from major e-commerce players contributed significantly to the volume gains. These factors were complemented by the integration achieved through the Ecom Express acquisition.

Margin Strength Amid Operational Challenges​

Crucially, MOSL highlighted that Delhivery's margins remained strong, a testament to disciplined operational execution. The ability of the company to maintain robust volumes while implementing tight cost control measures has been pivotal in maintaining profitability. This combination of high volume and managed costs is underpinning the positive outlook provided by the financial institution.

PTL Business Achieves Structural Turnaround​

Motilal Oswal also detailed a profound structural turnaround occurring within Delhivery's Parcel Transportation Logistics (PTL) business segment. Service EBITDA margins in the PTL division have significantly improved, rising from a negative 8.5 percent in the first quarter of FY24 to a positive 13.4 percent in the fourth quarter of FY26.

This margin recovery is primarily driven by favorable shifts in customer mix towards higher-yielding SME and retail clients. Rationalisation of low-profit contracts further supported this trend. The brokerage noted that expansion into sales teams aimed at strengthening customer acquisition and pricing discipline has led directly to yield expansion across the business units.