Delhivery’s stock dropped 14 percent to Rs 479 apiece on the BSE on October 20 after the logistics company said it expects moderate growth of shipment volumes for the rest of FY23 due to high inflation, average user spends, and total active shoppers remaining flat or declining during the ongoing festive season.
With Delhivery being one of the major players in third-party e-commerce logistics, the company's guidance on flat festive sales and moderate growth in FY23 is expected to have an impact on the outlook for the broader e-commerce segment.
In a letter to shareholders filed with the exchanges on its performance in the September quarter, Delhivery said that shipment volumes in its supply chain services (SCS) and truckload (TL) businesses declined sequentially, owing to seasonality in customers’ businesses.
The company's stock is now trading below its IPO issue price of Rs 487 apiece.
“However, both businesses have shown substantial double-digit growth compared to a year ago. Our cross-border business also showed steady growth despite a global slowdown and a decline in yields for both air and ocean freight,” the letter added.
But the company did not share any operating metrics saying that numbers will be shared once the board approves audited results for the quarter.
“Industrial output also remained weak in the first two months of the quarter. In spite of the challenging market conditions, our market position remains strong owing to our structural cost advantages, network size and investments in capacity,” the company said.
“Going forward we remain watchful of the market sentiments. We have made sufficient capacity investments in FY22 and early FY23 to sustain our current rate of growth and expect new mega-gateway and sorter decisions only by early FY24,” it added.
Delhivery’s revenue from operations had dropped 16 percent sequentially to Rs 1,746 crore in the June quarter (Q1) at a time when the e-commerce industry, which makes up the biggest revenue chunk, saw sales dip amid rising inflation.
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