Delhivery shares slide amid block deal buzz; Canada Pension Fund likely seller

Shares of Delhivery declined over 1% in early trade on Wednesday, driven by strong volume amid a report that Canada Pension Plan Investment Board (CPPIB) is likely to exit the logistics company. CPPIB, which holds 3.18% shares in the company, plans to sell its entire stake through a block deal today.

As per the report, the shares will be offered in a price range of ₹378-389 apiece, a discount of 0.7-3.5% to Tuesday’s closing price, with the deal size likely around ₹886 crore. At the end of the March quarter of FY24, CPPIB held 5.96% stake in the company. It sold a 2.77% stake in the company for ₹900 crore on April 25.

Early today, Delhivery shares opened marginally higher at ₹395.60 against the previous closing price of ₹392.35 on the BSE. Extending opening gained, the midcap stock gained as much as 2.9% to ₹403.65 amid strong volume. The stock, however, soon lost momentum and dropped 3.76% from opening high levels to touché a low of ₹388.45.

At the time of reporting, shares of Delhivery were trading 0.6% lower at ₹390, while the market capitalisation slipped to ₹28,774 crore. As many as 2.36 crore shares changed hands over the counter so far, compared with two-week average of 3.62 lakh stocks.

At the current price, Delhivery share are 20% lower than its 52-week high of ₹488.05 touched on February 5, 2024, while the stock is up 10% from its 52-week low of ₹354.50 hit on December 15, 2023.

In the last one year, the logistics stock has fallen nearly 3%, while it lost 8% in six months. In the calendar year 2024, the counter gained 1%, while it dropped 0.5% in the past one month.

Gurugram-based logistics and supply chain operator Delhivery posted a loss of ₹68.5 crore in March quarter of FY24, compared to loss of ₹159 crore in the same period last year. The company had posted a profit of ₹11.7 crore in the December quarter of FY24, for the first time since its stock market debut in May 2022.

In Q4 FY24, the revenue rose 12% to ₹2,076 crore from ₹1,860 crore recorded in the corresponding quarter last year. In the December quarter, Delhivery had clocked a revenue of ₹2,194 crore. On the operating front, EBITDA increased to ₹46 crore in Q4 FY24, versus ₹13 crore in Q4 FY23.

For the full financial year 2023-24, revenue rose to ₹8,142 crore, up 13% from ₹7,224 crore in FY23. The loss narrowed to ₹249 crore from ₹1,008 crore in the previous fiscal. This is the first time when the company turned EBITDA positive for the full year to ₹127 crore from a loss of ₹452 crore in FY23.

Post Q4 results, ICICI Securities retained ‘BUY’ call on Delhivery stock with a target price of ₹600, an upside potential of 32% from Friday’s closing price. Prabhudas Lilladher has also assigned ‘BUY’ rating with a price target of ₹530, citing faster than expected recovery in the Part Truckload Freight (PTL) margins. All business segments have reached service EBITDA breakeven, it says in its report.

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