DELHIVERY - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.7
| Stock Code | DELHIVERY | Market Cap | 33,490 Cr. | Current Price | 448 ₹ | High / Low | 490 ₹ |
| Stock P/E | 99.3 | Book Value | 135 ₹ | Dividend Yield | 0.00 % | ROCE | 2.71 % |
| ROE | 1.78 % | Face Value | 1.00 ₹ | DMA 50 | 416 ₹ | DMA 200 | 410 ₹ |
| Chg in FII Hold | -3.08 % | Chg in DII Hold | 2.93 % | PAT Qtr | 101 Cr. | PAT Prev Qtr | 61.2 Cr. |
| RSI | 70.1 | MACD | 8.18 | Volume | 27,57,000 | Avg Vol 1Wk | 67,66,234 |
| Low price | 237 ₹ | High price | 490 ₹ | PEG Ratio | 3.31 | Debt to equity | 0.15 |
| 52w Index | 83.4 % | Qtr Profit Var | 141 % | EPS | 3.13 ₹ | Industry PE | 23.4 |
📊 Analysis: Delhivery shows weak efficiency metrics with ROE at 1.78% and ROCE at 2.71%, far below industry standards. Debt-to-equity is low at 0.15, reflecting manageable leverage. EPS of 3.13 ₹ is modest relative to valuation. The stock trades at a very high P/E of 99.3 compared to industry average of 23.4, suggesting severe overvaluation. PEG ratio of 3.31 further indicates stretched valuations relative to growth. Dividend yield is 0.00%, offering no income support. Quarterly PAT improved from 61.2 Cr. to 101 Cr. (+141%), showing earnings momentum, but overall profitability remains weak. Technicals show overbought conditions with RSI at 70.1 and MACD positive (8.18).
💰 Ideal Entry Zone: Considering DMA levels (50 DMA at 416 ₹, 200 DMA at 410 ₹) and support near 370–380 ₹, the ideal long-term entry zone is 380–410 ₹. Current price (448 ₹) is above comfort zone, making fresh entry unattractive.
📈 Exit / Holding Strategy: For existing holders, short-to-medium term holding (1–2 years) is advisable to capitalize on momentum. Exit strategy: consider profit booking near 480–490 ₹ resistance zone. Long-term holding is not recommended unless ROE improves above 10% and profitability stabilizes.
Positive
- ✅ Debt-to-equity at 0.15 ensures manageable leverage.
- ✅ Quarterly PAT growth (+141%) shows earnings rebound.
- ✅ DII holdings increased (+2.93%), reflecting domestic institutional confidence.
- ✅ Strong 52-week performance (+83.4%).
Limitation
- ⚠️ Very weak ROE (1.78%) and ROCE (2.71%).
- ⚠️ Extremely high P/E (99.3) compared to industry average (23.4).
- ⚠️ PEG ratio of 3.31 suggests overvaluation relative to growth.
- ⚠️ No dividend yield, limiting investor income.
Company Negative News
- 📉 FII holdings decreased (-3.08%), showing reduced foreign confidence.
- 📉 EPS of 3.13 ₹ is modest relative to valuation.
- 📉 Overbought RSI (70.1) indicates risk of correction.
Company Positive News
- 📈 PAT improved from 61.2 Cr. to 101 Cr.
- 📈 DII holdings increased (+2.93%), reflecting domestic support.
- 📈 MACD positive (8.18), showing short-term bullish momentum.
Industry
- 🏦 Industry P/E at 23.4 highlights Delhivery trades at a steep premium.
- 🏦 Logistics and supply chain sector has long-term demand potential driven by e-commerce growth, but efficiency is critical for sustainability.
Conclusion
🔎 Delhivery is a debt-light company with strong recent profit rebound, but weak efficiency metrics and stretched valuations limit its attractiveness for long-term compounding. Ideal entry zone is 380–410 ₹. Suitable only for short-to-medium term holding, with exit near 480–490 ₹ unless ROE and profitability improve significantly.