This small cap stock, engaged in providing a full range of Logistics services including delivery of express parcels and heavy goods, PTL freight, and warehousing services among others came into focus after Macquarie highlighted an upside potential of over 45 percent.
Stock Performance
With a market capitalization of Rs 19,530.51 crore, Delhivery Ltd was trading at Rs 260.70 per share, marking a slight increase compared to its previous closing price of Rs 260 per share. The stock is currently trading at a discount of 45 percent from its 52-week high of Rs 478.
Brokerage View
Macquarie, an international brokerage, has given an ‘Outperform’ rating to Delhivery stock with a target price of Rs 380 per share, which suggests a 45 percent upside from its previous closing price of Rs 260. Previously, Macquarie had given a target of Rs 460 for the company, with an ‘outperform’ rating.
Underperformance
This stock underperformed its index, dropping 40 percent since its September levels, as compared to a 17 percent fall in the Nifty smallcap index.
Meesho’s internalisation push
The main reason for Delhivery’s decline is a shift in the third-party logistics industry, largely driven by Meesho, a key customer. Meesho is moving more of its logistics in-house, reducing its dependence on Delhivery. Additionally, Meesho is preparing for an IPO in India after shifting its legal base from the U.S.
Meesho is an Indian e-commerce platform that focuses on social commerce, enabling small businesses and individual sellers to sell products directly through social media channels. It offers a wide range of affordable products, mainly in fashion, home, and lifestyle categories.
Future Outlook
While the near-term outlook for Delhivery remains weak, Macquarie believes the company has long-term potential to dominate the logistics sector, which operates on a “Winner-Takes-All” model, meaning that a few major players tend to capture most of the market share.
Company Overview
Delhivery provides end-to-end logistics solutions, including warehousing, PTL freight, supply chain software and cross-border services, along with value-added services like returns, payment processing, and fraud detection.
Financial Performance
In the latest quarter, Delhivery reported an 8 percent increase in revenue from Rs 2,194 crore in Q3 FY24 to Rs 2,378 in Q3 FY25. This was accompanied by a strong 108 percent increase in net profits from Rs 12 crore to Rs 25 crore during the same period.
Written by Shwetha Sairam
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