Shares of Delhivery Ltd. gained after Credit Suisse upgraded it to "Outperform", citing the company's "strongest standing" in its industry.
Credit Suisse also raised the target price of Delhivery to Rs 550 apiece, implying an upside of 63.4%.
The express parcel market has been growing at 17–19%, and Delhivery has maintained its market share, according to Credit Suisse. Its current market share might be 27–28%, the brokerage said in a Nov. 30 note.
The Gurugram-based logistics company gained market share as its volume growth has been stronger than the industry's, the note said.
Credit Suisse said that the company still has a big lead with no new competitors. And as express parcel players have been positioned differently, Delhivery has been the most profitable, it said.
Delhivery leads with about 20 lakh parcels per day, followed by Expressbees. The Gurugram-based logistics company is the most scalable and profitable player with a well-spread, multifaceted business, the note said.
However, the "long-term growth trajectory may be intact, and the ongoing funding squeeze can reduce express parcel industry growth in CY23", Credit Suisse said.
Shares of the company rose 2.33% as of 12:14 p.m., compared to a 0.87% decline in the benchmark Nifty 50.
Of the 14 analysts tracking the company, 10 maintain 'buy', two suggest 'hold' and two recommend 'sell', according to Bloomberg data. The 12-month consensus price target implies an upside of 31.1%.
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