Last updated: February 22, 2023, 11:07 AM IST
Shares of Delhivery fell more than 3 per cent to Rs 334 per share on the BSE during Wednesday’s opening trading session after 1.7 per cent equity worth Rs 410 crore changed hands at an average price of Rs 338 per share in the block- deal window. The buyers and sellers were not immediately known.
The stock was up for seven straight days through Tuesday, even as third-quarter net losses widened. Delhivery reported a larger loss of Rs 195.7 crore for the third quarter ending December 2022 (Q3 FY23), compared to a loss of Rs 127 crore in the same quarter last year. Revenue also declined by about 9 percent to Rs 1,823 crore as compared to Rs 2,019 crore on an annualized basis (YoY).
Stocks have been under pressure since the company said in October 2022 that it expected moderate growth in shipping volumes for the remainder of FY23. Then it saw its biggest intraday drop of 18 percent.
“The EBITDA loss in the third quarter was lower than expected as gross profit was better and other costs were lower. Management showed confidence to further reduce losses. We believe that current pricing factors drive less than 10 percent growth in packages over the next 3-5 years, versus 30 percent+ in the past. We believe that B2B (Spoton), operational leverage and low e-commerce penetration driven growth are underestimated,” Jefferies, the global brokerage, said in an earnings review.
Delhivery, which is dominant in B2C, is making a mark in B2B with the acquisition of Spoton, say analysts who believe the company should break even in FY25E-26E with management’s focus on profitability in an industry with a strong growth in the back.
“Delhivery’s results in Q3FY23 were a mixed bag. With the integration of SpotOn, margin improvement was in line with expectations, but express parcels volume growth was slow at 6 percent quarter-over-year/flat year-over-year. That said, PTL volumes have been showing momentum since Jan. 23 and the midmile optimization should drive margin expansion. Moderation in growth at Express right now and FY24E uncertainty are key variables,” brokerage firm Nuvama Research said 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 ended. CA Swift Investments sold a 2.5 percent stake in the supply chain company on Feb. 20, which was snapped up by Morgan Stanley Asia (Singapore) PTE.
Softbank, which was a seller in Paytm, continues to hold its 18.42 stake in Delhivery, following December’s shareholder pattern. Fedex (2.87 percent) and Nexus Venture Partners (9.1 percent) have also not yet redeemed their stake.
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