Kotak Institutional Equities initiated coverage on Shadowfax Technologies shares with an 'Add' rating and a target price of ₹310. According to reports from CNBC TV18, the brokerage valued the company's Express business at 27X two-year forward EV/EBITDA and at 10% discount to Delhivery's FV multiple. The rating reflects expectations of strong growth potential in India's third-party logistics market, with the brokerage noting that this reflects margin pressure from higher dependence on Meesho (2X/1.5X that of Delhivery in FY2026/28E). Kotak Equities has become the sixth brokerage to initiate coverage on Shadowfax Technologies, with their price target being the highest among the six analysts currently tracking the stock.
Shadowfax Technologies is positioned as the second-largest player in India's largely duopolistic third-party e-commerce logistics market, competing with Gurugram-based Delhivery. As reported by Kotak Equities, the company is expected to outgrow the broader 3PL industry at 1.4X growth over FY2026-30 and gain ~900 basis points of market share during this period. The growth strategy focuses on strong exposure to Meesho and ability to gain share across relatively underpenetrated segments. The brokerage highlighted that cost-deflation levers and superior asset turnover ratios position the company well to mitigate key risks, including increased concentration to Meesho and pricing pressure from customers. A duopoly structure typically provides favorable conditions with limited price wars and pricing power over customers, though the same Meesho exposure that drives growth also caps the rating.
Kotak Equities projects the company will deliver a revenue CAGR of 31% over FY2026-30, supported by around 32% growth each in Express and hyperlocal shipments with relatively stable realizations. According to the brokerage's analysis, Meesho's in-house logistics (Valmo) share is expected to stabilize at higher 60% levels from closer to 50% levels at present. The firm's assumptions include approximately 420 basis points improvement in adjusted EBITDA margin driven by normalization of loss shipments and improving efficiency in partner expenses. The brokerage's valuation factors in back-ended support from transportation expenses, supporting the positive outlook for the company's financial performance. The 10% discount to Delhivery's fair value multiple reflects the structural margin pressure from higher Meesho dependence, with this concentration risk expected to reduce from 2X to 1.5X Delhivery's levels between FY2026 and FY2028.
On Wednesday, Shadowfax Technologies shares were trading 1.7% higher at ₹287.85, as reported by CNBC TV18. The stock has demonstrated strong performance, rising 11% in the last one month and 127% from its IPO price. On Tuesday, the stock ended 3.83% higher at ₹283.25 apiece on the BSE, according to NDTV Profit. Among the six analysts covering the stock, all have 'buy' ratings with price targets ranging from ₹280 to ₹300 per share. The brokerage identified key risks including increased concentration to Meesho and pricing pressure from customers, but noted that cost-deflation levers and superior asset turnover ratios position the company well to mitigate these risks.
