Delhivery’s Mega Block Deal: 88.76 Lakh Shares Traded for Rs 389.6 Crore

Block Deal in Delhivery: Total Transaction of Rs 389.6 Crore

Shares of Delhivery Ltd., the logistics services provider, were trading flat on Wednesday following a significant block deal in the stock. This transaction involved the exchange of 88.76 lakh shares, accounting for 1.2% of the company’s total equity. The total value of this block deal amounted to Rs 389.6 crore, with the shares being traded at an average price of Rs 439 per share. However, the identities of the buyers and sellers involved in this transaction remain undisclosed.

Mutual Fund Holdings and Stock Performance

As of the June quarter, India’s domestic Mutual Funds hold a 19.05% stake in Delhivery. Prominent mutual funds with stakes in the company include SBI, Mirae, Nippon Life India, and HDFC. Despite the block deal, Delhivery’s shares were trading 0.48% lower at Rs 436.10 apiece on the NSE, remaining below its IPO price of Rs 487. Notably, the stock has appreciated by 13% in 2024 so far and has seen a 7% increase over the past 12 months.

Financial Performance

Delhivery reported a Q1FY25 top-line growth of 13% year-on-year (YoY). The company’s EBITDA for the quarter stood at 4.5%, while its adjusted EBITDA was 1.7%. The Express Parcel service maintained a stable EBITDA of 18%, and the Part Truckload (PTL) business saw an improvement in EBITDA to 3.2%. Delhivery reported a Profit After Tax (PAT) of Rs 54 crores, which was positively impacted by a change in depreciation methodology and a reversal of ESOP costs.

Operational Highlights

In terms of operations, Delhivery’s Express Parcel business grew by 6% YoY and 5% quarter-on-quarter (QoQ), with a 1% YoY and 4% QoQ increase in volume. The PTL business demonstrated a robust 25% YoY growth in revenue, with a 16% YoY increase in freight tonnage. Additionally, the Supply Chain Services (SCS) segment grew by 26% YoY, driven by strong demand from air conditioning customers. Cross-Border services also saw growth, with a 2% YoY and 39% QoQ increase, primarily due to volume and yield improvements in ocean freight.

Customer Base Expansion

Delhivery expanded its customer base from 33,000 to nearly 35,000 during the quarter, with significant growth observed in the heavy goods category, which contributed to revenue enhancement.

Strategic Insights

Strategically, Delhivery transitioned from the Written Down Value (WDV) method to straight-line depreciation, aligning with industry standards and improving profitability visibility. The management anticipates strong growth in volumes during peak periods, forecasting a steady state growth of 15%-20% annually for the e-commerce market. Additionally, the company is developing quick commerce and rapid in-city delivery initiatives, including a network of shared dark store warehousing for e-commerce companies.

Future Outlook

Looking ahead, Delhivery’s management is optimistic about continued growth in the PTL and SCS segments, leveraging integrated service offerings. The company is confident in sustaining margins in the Express and PTL businesses, targeting 18%-20% margins in the Express segment. Additionally, the Supply Chain Services sector is expected to see robust demand, with a strong pipeline of customers across various industries.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.