Delhivery Shares Tank As Stake Worth Rs 410 Crore Changes Hands; Details

Last Updated: February 22, 2023, 11:07 IST

Shares of Delhivery tanked more than 3 per cent to Rs 334 apiece on the BSE in Wednesday’s opening trading session after 1.7 per cent equity worth Rs 410 crore changed hands at an average price of Rs 338 a share in the block-deal window. The buyers and sellers were not known immediately.

The stock rallied for seven straight days till Tuesday even as its Q3 net loss widened. Delhivery reported a bigger loss at Rs 195.7 crore for the third quarter ended December 2022 (Q3 FY23) as compared to a loss of Rs 127 crore in the yea-ago quarter. Its revenue also declined about 9 per cent to Rs 1,823 crore as against Rs 2,019 crore year-on-year (YoY).

The stock has been under pressure ever since the company said in October 2022 that it expected moderate growth in shipment volumes for the rest of FY23. That’s when it saw its biggest intraday drop of 18 per cent.

“Q3 EBITDA loss was lower than expectations as gross profit was better and other expenses lower. Management exhibited confidence on reducing losses further. We believe current price factors less than 10 per cent express parcel growth in the next 3-5 years vs 30 per cent+ levels seen in the past. We believe B2B (Spoton), operating leverage and low e-commerce penetration driven growth are being underestimated,” global brokerage Jefferies had said in earnings review note.

Dominant in B2C, Delhivery is making a mark in B2B through its Spoton acquisition, say analysts who believe that the company should break even in FY25E-26E with management’s focus on profitability in an industry with a strong growth tailwind.

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“Delhivery’s Q3FY23 results were a mixed bag. With SpotOn’s integration, margin improvement met expectations, but express parcel shipment volume growth was sluggish at 6 per cent QoQ/flat YoY. That said, PTL volumes are showing momentum since Jan-23 and the midmile optimisation should aid margin expansion. Growth moderation in Express currently and the FY24E uncertainty are the key variables,” said brokerage Nuvama Research in a note earlier this month.

This was followed by some selling pressure from pre-IPO investors in November 2022 as their lock-in period expired. CA Swift Investments on February 20 divested a 2.5 per cent stake in the supply-chain company which was picked up by Morgan Stanley Asia (Singapore) PTE.

Softbank, which was a seller in Paytm, continues to hold its 18.42 stake in Delhivery, according to the December shareholding pattern. Fedex (2.87 per cent) and Nexus Venture Partners (9.1 per cent) have also not offloaded their stake yet.

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