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High-Quality Logistics Stock Trading Near 52-Week Low, ICICI Securities Lists 5 Reasons To Buy

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The shares of top logistics stock, Delhivery Ltd is trading near 52-week low. The company has a market capitalisation of Rs 24,114 crore. Should you buy the stock now or not? According to ICICI Securities November 19, 2022 report, the stock has been given buy rating with a target price of Rs 460 apiece.

 

If you buy Delhivery at the current market price of Rs 331 apiece, you will get a return of 39%. Check key takeaways below:

1. Delhivery Stock Performance

1. Delhivery Stock Performance

The last trading price of the stock is Rs 331 apiece with an intraday gain of .52% as on November 25, 2022. The stock's 52-week high is Rs 708 apiece and 52-week low is Rs 317 apiece, respectively.

2. Delhivery Return

2. Delhivery Return

The stock has declined 38% in last 1-year, 35% in last 6-months, and 40% in last 3-months.

3. Five Reasons To BUY Delhivery
 

3. Five Reasons To BUY Delhivery

1) Lowest cost structure compared to peers across first mile, mid mile and last mile logistics in express parcel business is a competitive edge in a cost-sensitive market, 2) technology and trust moat should strengthen its dominant share in niche segments such as secured delivery, 3) hands on management ensures agile decision making and timely intervention during exception handling, 4) strong balance sheet should help sustain investments through periods of tight liquidity and 5) uncharacteristically high (compared to peers) brand recall among end-users could make it a key beneficiary of open ended B2B ecommerce marketplaces (Link to our thematic note on B2B e-commerce) and ONDC roll out.

4. Delhivery Valuation

4. Delhivery Valuation

According to ICICI Securities, "We discount EV calculated at 20xFY26E EV/EBITDA by 1.5 years (at 20% discount rate) to arrive at our price target of Rs460. We believe risk-reward skew for the stock is attractive at current market price (5.3:1). We envisage an upside scenario where the stock re-rates to Rs620 if revenue growth recovery in express parcel and PTL segments are higher than estimates. We assume a downside case where the stock could de-rate to Rs300 if EBITDA margin profitability is pushed beyond Q4FY23 and medium-term revenue growth visibility worsens further due to global headwinds."

5. About Delhivery

5. About Delhivery

It provides supply chain solutions to a diverse base of over 29200 active customers such as e-commerce marketplaces, direct-to-consumer e-tailers and enterprises and SMEs across several verticals such as FMCG, consumer durables, consumer electronics, lifestyle, retail, automotive and manufacturing.

This is achieved through high-quality logistics infrastructure and network engineering, a vast network of domestic and global partners and significant investments in automation, according to its official website.

Disclaimer

Disclaimer

The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.

 

Story first published: Sunday, November 27, 2022, 7:30 [IST]
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