E-commerce businesses are aware that there isn’t another Delhivery, and the circumstances are right for the company to make the risky decision: Kotak Securities
Kotak Securities upgrades Delhivery stock to ‘Buy’, hikes target price to Rs 570
Kotak Securities raised the target price of Delhivery Ltd.‘s stock from Rs. 500 to Rs. 570 and upgraded the firm’s rating from “Add” to “Buy.” The stock has a 23 percent upside from its current market price according to the brokerage firm’s new target price.
According to Kotak Securities, e-commerce businesses are starting to realize that “there isn’t another Delhivery” and that the circumstances are right for the company to make the risky decision.
According to the brokerage firm, businesses in Delhivery’s industry have little protection from the company’s relentless effort to lower prices. “Unlike this logistic company, its peers have not been able to meaningfully improve cost structure with higher volumes and have seen their losses accelerate faster than sales,” Kotak Securities stated.
According to the brokerage firm, the logistic comapny’s business model enables it to increase the value of its volume gains.
In a research published on March 4, ICICI Securities added that it is optimistic on the logistic comapny among midcap firms. The firm had set a target price of Rs 540 for the Delhivery shares, with a stop loss of Rs 437.
Even though shares of the logistic company have increased by more than 20% year to date, they have decreased by about 2% over the previous five days.
Delhivery’s shares were up 1.3% at Rs 464.50 at 12:43 PM.
Disclaimer: The opinions and financial advice provided by financial specialists on swingtradingplan.com are their own and do not represent the website or its administration. Before making any financial decisions, consumers are advised by Swingtradingplan.com to consult with qualified professionals.
Frequently Asked Questions (FAQs)
What was the previous rating of Delhivery stock by Kotak Securities before the upgrade?
The previous rating of Delhivery stock by Kotak Securities was ‘Add’.
To what amount did Kotak Securities increase the target price of the said logistic comapny?
Kotak Securities increased the target price of Delhivery stock to Rs 570 from Rs 500.
What is the new target price set by Kotak Securities for Delhivery?
The new target price set by Kotak Securities for Delhivery is Rs 570.
Why does Kotak Securities believe now is the right time for Delhivery to take bold actions?
Kotak Securities believes that the conditions are apt for Delhivery to take bold actions because e-commerce players are realizing that “there isn’t another Delhivery”, indicating a unique competitive position in the market.
How do Delhivery’s competitors compare in terms of pricing pressure and cost structure?
The logistic company’s competitors have a limited defense against its pricing pressure and unlike Delhivery, they have not been able to meaningfully improve their cost structure with higher volumes, resulting in their losses accelerating faster than sales.
What advantage does Delhivery’s business model provide according to Kotak Securities?
According to Kotak Securities, Delhivery’s business model allows the company to magnify its gains from volume gains, giving it a competitive advantage.
What was the target price set by ICICI Securities for Delhivery?
ICICI Securities set a target price of Rs 540 for Delhivery shares.
How has Delhivery’s stock performed year-to-date?
The logistic company’s shares have gained over 20 percent in the year-to-date.
At what price were Delhivery shares trading at around 12:43 pm as mentioned in the article?
At around 12:43 pm, shares of Delhivery were up 1.3 percent at Rs 464.50.
Why do e-commerce players believe “there isn’t another Delhivery” according to Kotak Securities?
E-commerce players believe “there isn’t another Delhivery” because of its unique competitive position, which includes its ability to handle pricing pressure, its innovative cost structure, and the company’s capability to enhance its gains from increased volumes, distinguishing it significantly from its competitors.
