Pointing out that Delhivery’s adjusted EBITDA margins turned positive in FY22, MS said the premium valuation of the stock is justified given its superior growth profile. At EV/Adj EBITDA multiple of 54x FY24 estimates, Delhivery’s valuation appears to be at a premium compared to its peers that trade at 10-22x.
The brokerage’s base case scenario shows that its ROIC is likely to be in high teens in FY26. It is also impressed by its stronger balance sheet position in comparison to peers.
Describing Delhivery as a scaled, sound and strong company, it said factors that could trigger an potential upside in the stock are continued market share gains in the express parcel business as well as better-than-expected performance in the PTL business.
Shares of the unicorn that listed on stock exchanges on May 24 were sold at an IPO price of Rs 487 per share. Since then, the stock has added only about 1 per cent.
In FY22, the new-age logistics player reported a consolidated loss of Rs 1,011 crore, compared to Rs 415.7 crore in the previous fiscal year. Total consolidated revenue more than doubled to Rs 7,038.4 crore in FY22.
Trendlyne data shows that the average consensus recommendation on Delhivery from 3 analysts is Hold and the average price target indicates an upside potential of over 21 per cent.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsBit.us is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
