Shares of Delhivery, a logistics service provider, hit an all-time low in Tuesday's trade. The stock started the trading session on a shaky note at ₹402, and it eventually dropped to an all-time low of ₹376.95 on the NSE, it then ended nearly 3.96% lower at Rs. 383.40, with 3.8 million shares traded on both the NSE and BSE.
Over the past four trading sessions, the stock has lost close to 32% of its value. The stock began to plummet after the company's July-September quarter business update was released. On October 19, the company said it was likely to see an adverse impact from high inflation and would clock moderate growth in shipments for the rest of the financial year.
"As inflationary pressures and service disruptions due to monsoon ease across the country, we expect improvement in volumes, revenue, and service margins going forward, "the company said in an exchange filing.
"We have made sufficient capacity investments in FY22 and early FY23 to sustain our current rate of growth and expect new mega-gateway and sorter decisions only by early FY24," the company said.
Meanwhile, the lock-in period for its pre-IPO shareholders expires on November 24, which may result in more selling of shares. Delhivery’s IPO was the second biggest this year after LIC and has been among the top five since 2021. Delhivery was listed on the exchanges on May 24, 2022 at ₹495.2 against the issue price of ₹487.
The stock fell below its IPO price just one month after it was listed, but it quickly recovered and reached a record high of ₹708.45 on July 21. However, the stock failed to maintain this bull run and fell below its price for the second time on October 20. The stock is currently trading 21.3% below its issue price and 45.88% below its all-time high.
When the stock was trading around the ₹600 mark earlier in September, domestic brokerage firm Kotak Securities downgraded it to ₹540. The brokerage said that the stock's current market price does not factor in growth moderation in the e-commerce sector volumes.
IIFL Securities also issued a "sell" recommendation on the stock in June, with a target price of ₹442 after the company reported its Q4FY22 results. IIFL said the valuation is built-in seamless execution, which seems challenging. The stock's risk-reward remains unfavourable, it said, suggesting investors wait for a better entry point.
The company reported a net loss of ₹119.8 crore in the March quarter, despite revenue from operations more than doubling to ₹2,071 crore from ₹1,031 crore a year ago.
The losses continued for this new-age tech stock. For the first quarter of this fiscal, it reported a net loss of ₹399 crore against a net loss of ₹130 crore in the year-ago period. The company's operating expenses during the quarter jumped to ₹1,999.8 crore, a rise of 44% from ₹1,389.1 crore in the same quarter of last fiscal.
Gurugram-based Delhivery Limited offers a full range of logistics services, including express parcel and heavy goods delivery, part truckload freight ("PTL"), truckload freight ("TL"); warehousing, supply chain solutions; cross-border express and freight services; and supply chain software, along with value-added services, such as e-commerce return services, payment collection and processing, installation and assembly services, and fraud detection.
An average of 13 analysts polled by MintGenie have a 'hold' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.