Delhivery Bags Order From Havells India

Delhivery's shares rose by 2.52% to ₹421.60 after securing a significant contract to manage Havells India's supply chain in the western region. The deal involves using Delhivery's technology-driven solutions to enhance speed, accuracy, and visibility. Delhivery's recent acquisition of Algorhythm tech will aid data-centered optimization. Financially, Delhivery improved with reduced losses and increased revenue, while its shipment volumes also grew.

Delhivery & Havells: From Transporters to Expansion Allies

On August 9, Delhivery's shares exhibited a positive trajectory, trading up by 2.52% at ₹421.60. This upward movement followed the company's noteworthy achievement of securing a contract to cater to Havells India's demand in the western region using its integrated supply chain solutions.

Delhivery has emerged victorious in clinching a contract that involves conceptualizing, constructing, and operating the factory-to-customer supply chain for Havells India Limited across western India.

To accomplish this endeavor, Delhivery intends to leverage its technology-driven integrated warehousing and transportation solutions, aiming to deliver heightened speed, accuracy, and enhanced end-to-end visibility.

In a bid to bolster their collaboration, Delhivery and Havells are preparing to jointly inaugurate novel warehouses situated in western India. These warehouses will be strategically positioned to accommodate diverse demands, spanning from general and modern trade to the burgeoning realm of e-commerce retail.

Underlining its commitment to innovation, Delhivery's recent acquisition of Algorhythm tech will enable the logistics company to capitalize on data-centered optimization of Havells' supply chain operations.

Recent financial data showcases Delhivery's commendable progress, as the company has managed to substantially reduce its net loss to ₹89.5 crore for the quarter concluding in June FY24, a marked improvement from the ₹399.3 crore loss incurred in the corresponding period of the previous year.

During the same quarter, Delhivery's consolidated revenue from operations demonstrated an impressive year-on-year surge of 10.5%, amounting to ₹1,930 crore. Additionally, the company's adjusted EBITDA loss witnessed a remarkable reduction of 89%, totaling ₹25 crore in Q1. 

Furthermore, Delhivery's express parcel shipment volumes displayed a notable growth of 19%, reaching a count of 182 million shipments in Q1 FY24, up from 152 million shipments in Q1 FY23. 

We have won important contracts in Q1, from marquee clients like TATA Motors, Havells, and MamaEarth which we expect to reflect in subsequent quarters", said Sahil Barua, MD & CEO.

In 2017, Delhivery established its initial collaboration with Havells by introducing part-truck load services. As time progressed, their partnership evolved from a mere transportation service provider to a strategic ally in Havells' overall expansion.

This progression has culminated in Delhivery's commitment to further enhance its collaboration by leveraging data-driven optimization techniques to streamline Havells' supply chain operations.

Vineet Jain, Senior Vice President of Havells India, expressed confidence in Delhivery's ability to contribute significantly to Havells' growth ambitions. He highlighted Delhivery's technological prowess, operational expertise, and innovative approach as the driving forces behind this partnership.

Delhivery, renowned as India's premier fully integrated logistics services provider, boasts an extensive network encompassing over 18,500 pin codes. In contrast, Havells India stands as a distinguished player in the Fast Moving Electrical Goods (FMEG) sector, operating within the consumer durables industry. With a footprint spanning 60 countries, Havells has achieved a substantial global presence.

Presently, the shares of Delhivery are experiencing a positive trading trend, marked by a 1.4% increase in value to ₹417.15. Although the stock has registered a commendable 25% growth in the year-to-date period, it remains below its Initial Public Offering (IPO) price of ₹487.

Experts Views

Analysts' opinions on Delhivery shares have been mixed, with varying target prices and recommendations.

CLSA has reaffirmed its 'buy' recommendation for Delhivery's shares and increased the target price for the logistics company from ₹497 to ₹550.

On the other hand, Morgan Stanley downgraded Delhivery's stock from 'overweight' to 'equal-weight' while raising its target price from ₹415 to ₹460.