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We believe Delhivery Ltd.’s current valuations provide a great opportunity for this high quality stock. The risk-reward skew at current market price is very attractive in our view (5.3:1).
While we acknowledge growth has been slowing in e-commerce sales in FY23, we believe it is a transient issue and is unlikely to be symptomatic of structural weakness in the space.
Five reasons to buy Delhivery:
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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,
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technology and trust moat should strengthen its dominant share in niche segments such as secured delivery,
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hands on management ensures agile decision making and timely intervention during exception handling,
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strong balance sheet should help sustain investments through periods of tight liquidity and
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uncharacteristically high (compared to peers) brand recall among end-users could make it a key beneficiary of open ended business-to-business ecommerce marketplaces and open network for digital commerce roll out.
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