Delhivery is Nothing Like Zomato or PayTM: Credit Suisse

Gurugram-based brokerage firm disagrees with the association of Delhivery with other internet-based firms such as Zomato, PayTm, and Nykaa. According to Credit Suisse, despite the logistics company's reliance on delivering items for top e-commerce businesses, it does not face what its clients must do, spend money to attract customers.

“We prefer Delhivery to other internet peers on no customer acquisition cost, diversified growth — e-commerce and broader logistics, and cheaper valuation for the same growth play,” said a report by the brokerage firm.

Credit Suisse commenced coverage of the firm, which floated on May 24 at a flat 1% premium, with a 'outperform' rating. It anticipates a 26 percent increase in share price to $675 in a year. It believes Delhivery has a "deep moat" in terms of scale, growth, and profitability.

Its rating is based on “strong moat and leadership in extant scale, network, and technology, recent breakeven, with incremental growth aiding profitability synergistically, diversified growth in e-commerce, broader logistics and potential merit as an internet play vs others.”

Due to e-commerce, the company also increased its parcel volumes in FY22, acquiring a high market share of roughly 24-25 percent in the third quarter. Credit Suisse forecasts structural growth in e-commerce volumes of more than 30%.