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:
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,
technology and trust moat should strengthen its dominant share in niche segments such as secured delivery,
hands on management ensures agile decision making and timely intervention during exception handling,
strong balance sheet should help sustain investments through periods of tight liquidity and
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.