Delhivery shares surge to highest level since listing

02 Jun , 2022 By : Kanchan Joshi

Shares of Delhivery Ltd rose to its highest level of Rs617 apiece since listing on the BSE in Thursday's trading session. The stock, which made its market debut last week on Tuesday, May 24, 2022 on the domestic stock exchanges, has risen more than 13% in over a week.

The Gurugram-based firm announced its first quarterly results since listing on Monday and reported a net loss of Rs119.8 crore in the March 2022 quarter. Though, Delhivery's revenue from operations doubled to Rs2,071 crore during the period from Rs1,031 crore a year earlier.

It posted adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) of Rs72 crore in the three months ended March. The company expects to turn cash flow positive over the next six to eight quarters.

“Investors are not uncomfortable with operationally profitable companies. It was important to get to operational profitability and maintain revenue growth," the logistics startup's chief executive officer (CEO) Sahil Barua said post the Q4 results.

Delhivery shares are up over 25% from its IPO issue price of Rs487 apiece. The initial public offering (IPO) of the supply chain company was subscribed 1.63 times on its final day of subscription. Delhivery provides a full range of logistics services, including express parcel delivery, heavy goods delivery and warehousing.

“Technology stocks had corrected more than 20% in the period between filing our initial draft documents to our IPO so we modified our pricing," Barua told Bloomberg in an interview this week. “We decided we’d rather have modestly-priced shares which rise rather than tumble on listing."

Delhivery has been grabbing market share by spending its cash on buying smaller rivals. It will continue to chase acquisitions with the proceeds of the initial public offer (IPO), Barua said.

Express package shipments increased by 101% in Q4, above the industry's 40% growth. Simultaneously, Delhivery said it has broadened its revenue base, with express parcel service accounting for 58% of sales and part-truckload (PTL) freight accounting for 24% of revenue in FY22.