Delhivery shares tank 4% amid reports of Rs 410 crore-block deal

Shares of Delhivery fell close to 4% in intra-day trade on Wednesday amid a huge spike in volumes and reports of a block deal. The stock was last trading at Rs 342.65 a piece on NSE, down 1.79% from the previous close.

According to reports, 1.7% of the company’s equity worth about Rs 410 crore changed hands at a discounted price from the previous day's close. For the past five days, Delhivery shares have been on the rise, rallying 6%.

The company reported a widening net loss in the December quarter at Rs 196 crore, compared with Rs 126 crore in the same quarter of last year. Revenue from operations fell 9% year-on-year (YoY) to Rs 1,823 crore for the quarter under review.


The company said its overall business economics continued to improve with the adjusted EBITDA margin improving 330 bps from -7% in the second quarter of FY23 to -3.7% in the third quarter.

In line with the September quarter, the incremental gross margin in the Express Parcel and PTL (Part Truckload services) businesses combined continued to be approximately 50% in the third quarter as well.

JM Financial says even though the company guides towards a 50% gross margin on incremental transportation revenue, it expects that to last only for a few more quarters before reverting to 25-30%.

"Only a reversal of PTL volumes and express parcel growth would help Delhivery report adjusted EBITDA profitability again in H2FY24," the brokerage said in a report while initiating a "Hold" rating with a target price of Rs 350.

Meanwhile, post the Q3 results, Macquarie maintained an outperform rating on the stock with a target of Rs 440. The global investment bank estimates Delhivery's share price is now pricing in a 16% 10-year revenue CAGR.

Jefferies retained its "Buy" rating on the stock with a target price of Rs 570, saying the current price factors less than 10% express parcel growth in the next 3-5 years against 30% levels seen in the past.

"We believe B2B (Spoton), operating leverage, and low e-commerce penetration is driven growth are being underestimated," it said. Another brokerage ICICI Securities maintained its Buy rating on Delhivery with a target price of Rs 425.

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