Shares of Delhivery rose after four sessions today after Australian brokerage Macquarie initiated coverage on the logistics services provider with a buy call. The brokerage has assigned an outperform rating to the firm with a target price of Rs 440, which amounts to an upside of 42% compared to the previous close on BSE. It sees a clear path to 100% returns in 3 years for the stock. Buoyed by the forecast, the share of Delhivery rose 3.5 per cent intraday to Rs 321 against the previous close of Rs 310.15 on BSE. Market cap of Delhivery rose to Rs 23,120 crore. Total 0.42 lakh shares of the firm changed hands amounting to a turnover of Rs 1.34 crore on BSE.
However, the share is trading 3.42% away from the 52-week low of Rs 306. The stock has lost 4.39% in 2023.
The brokerage has forecasted four times volume growth by FY30 with a sustainable cost leadership position, positive unit economics and no external funding needs.
"Over the next few quarters, we see a low-growth operating environment due to tighter funding conditions for e-commerce platforms," the brokerage said in a note. If the low-growth operating period becomes the new normal, Macquarie's bear case valuation would be Rs 215 with a 30% downside from the current price, it said.
In terms of technicals, the relative strength index (RSI) of the stock stands at 31.6, signaling the stock is neither oversold nor overbought. Delhivery stock is trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
In the second quarter of this fiscal, net loss narrowed to Rs 254 crore against the loss of Rs 635 crore logged in the year-ago period. The loss also fell sequentially as it stood at Rs 399 crore in the June 2022 quarter. Delhivery reported a 22 percent higher revenue in Q2FY23 at Rs 1,796 crore against Rs 1,497.7 crore revenue reported in the corresponding quarter of the last fiscal. Revenue rose marginally quarter-on-quarter as well as the same stood at Rs 1,745.7 crore in Q1FY23. The adjusted EBITDA loss fell to Rs 125 crore in Q2FY23 on a sequential basis as against Rs 217 crore reported in Q1FY23.
Delhivery is engaged in providing a full range of logistics services, including delivery of express parcel and heavy goods, PTL freight, TL freight, warehousing, supply chain solutions, cross-border Express, freight services, and supply chain software. Delhivery is the largest and fastest-growing fully integrated logistics services player in India by revenue as of FY21.
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