Buy, Sell or Hold Delhivery: How stock is placed fundamentally and technically? Check expert's view, price target

Delhivery share: Notwithstanding the current drag in the overall revenue figures of Delhivery in FY23, brokerages like ICICI Bank, Jefferies and HSBC maintain a buy rating on this stock. Breaking from its losing streak over the past seven trading sessions, the stock was trading with gains of 1.15 per cent on the NSE at Rs 329. 

Jefferies puts a price target of Rs 700 estimating a 114 per cent upside in this stock. The stock was recommended at a price of Rs 326.  

Meanwhile, HSBC has lowered the targets by nearly 36 per cent from Rs 710 to Rs 455. The current target is at Rs 455, which is still 40 per cent higher from the level of Rs 326 at which it was recommended. It has lowered the target on the back of consecutive weak quarters, which it said has said has shattered the confidence of the street. Yet, it maintains a buy rating in this stock.        

ICICI Securities has also upgraded its stance on Delhivery from Sell to BUY calling the current weakness as transient which is “unlikely to be symptomatic of structural weakness in the space”.

“We believe Delhivery’s current valuations provide a great opportunity to BUY this high-quality stock,” the brokerage noted. The target is Rs 351 from this brokerage.

The company has cut its revenue growth estimates “meaningfully” for FY23/FY24E/25E (16%/23%/24%), it said in a note.

The brokerage has cited its lowest cost structure compared to peers across first mile, mid mile and last mile logistics in express parcel business to be a competitive edge in a cost-sensitive market.

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Even HSBC highlighted that Delhivery is primarily an operating leverage story.  

ICICI Securities also opined that technology and trust moat should strengthen its dominant share in niche segments such as secured delivery. A hands-on management ensures agile decision making and timely intervention during exception handling, it said.  

Delhivery’s share price has corrected by 50 per cent from peak levels of July 2022 on concerns around sustainability of revenue growth and path to profitability, ICICI Securities report said.

The stock has corrected 14 per cent in the last 7 trading sessions.

Intraday Chart

Price Movement 

“We envisage an upside scenario where the stock re-rates to Rs 620 if revenue growth recovery in express parcel and PTL segments are higher than estimates,” the ICICI Securities said.

However, downside up to Rs 300 is not ruled out, says this brokerage if EBITDA margin profitability is pushed beyond Q4FY23 and medium-term revenue growth visibility worsens further due to global headwinds.

Technical Analysis

Expert Nilesh Jain sees a further downside up to Rs 300-Rs 310 on current chart structure. His recommendation is to exit the stock if the view is near to short term. The stock is trading in an oversold territory and could see a pullback.

Jain, who is Assistant Vice President - Lead Derivative and Technical Research at Centrum Broking, recommends exit on rise at levels between Rs 350-Rs 370.

Delhivery Vs Sensex 

Source: BSE

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)