Be it ordering a pair of sneakers late at night or a phone charger that you urgently need, the expectation for millions of online shoppers in India is to receive the package in a day or two.
What remains invisible to consumers is the complex logistics system ensuring those packages move smoothly across cities, warehouses and delivery vans. Behind the scenes, logistics firm Delhivery relies on algorithms that constantly optimise where each parcel should go next, sometimes even rerouting shipments mid-journey to avoid congestion, as per a recent report by Motilal Oswal Financial Services.
Motilal Oswal has reiterated a ‘Buy’ rating on Delhivery, setting a target price of Rs 580 per share, implying roughly 35% upside from the current market price of around Rs 429.
When warehouses get crowded
India’s logistics network often faces sudden spikes in demand, especially during festive sales or major online shopping events. Certain sorting hubs can quickly become overloaded while others remain underutilised.
Delhivery’s automated capacity management system is designed to solve this imbalance, the report said. According to the Motilal Oswal report, the technology continuously monitors shipment flows and capacity utilisation across nodes in the network. When congestion begins to build at a particular hub, the system dynamically redirects shipments to underutilised nodes.
The rerouting happens in real time, ensuring parcels keep moving even during peak demand periods. By optimising network utilisation this way, the company can maintain delivery timelines and improve service margins, the report said.
In practical terms, a package travelling between two cities may pass through a completely different sorting hub than originally planned, simply because the algorithm identifies a faster or less congested path.
Logistics becomes a technology problem
The increasing reliance on software reflects a broader transformation in India’s logistics sector. Traditionally fragmented and operationally heavy, the industry is rapidly evolving into a technology-driven ecosystem, powered largely by the rise of e-commerce. Motilal Oswal noted that Delhivery has embedded technology across its operations, allowing it to operate more like an integrated logistics platform rather than a conventional courier network.
This technological backbone also helps the company handle large shipment volumes more efficiently. The brokerage estimates that the express logistics segment will grow at a 16% revenue CAGR between FY25 and FY28, driven by strong e-commerce volumes and industry consolidation.
Meanwhile, the company’s part-truckload (PTL) segment is expected to grow at a 17% CAGR over the same period, aided by rising SME shipments and the adoption of value-added logistics services, the report added.
Consolidation could favour organised players
According to the report, as smaller, cash-burning players struggle to scale, volumes are gradually moving toward larger and better-capitalised operators. Delhivery is emerging as one of the stronger platforms in this transition, as per the report. The company recently strengthened its network through the Rs 14 billion acquisition of Ecom Express, which is expected to enhance rural reach and improve network density.
Motilal Oswal estimates the combined entity could command around 20–25% market share in express parcel logistics, further strengthening its competitive position.
Improving profitability outlook
With shipment volumes rising and network efficiencies improving, analysts expect the company’s financial performance to strengthen over the next few years.
Motilal Oswal projects Delhivery’s revenue, EBITDA and adjusted profit to grow at a CAGR of 14%, 44% and 54%, respectively, between FY25 and FY28.
The brokerage expects the company’s EBITDA margin to expand to about 8.5% by FY28, up from roughly 4.2% in FY25, supported by operating leverage and better asset utilisation across its logistics network.
And for the consumer waiting on that next online order, it means the algorithm deciding the fate of their package is working quietly in the background, making sure the delivery arrives right on time.