Delhivery Ltd Downgraded to Strong Sell Amid Mixed Financial and Technical Signals

Quality Assessment: Weak Profitability and Management Efficiency

Delhivery’s quality metrics have raised significant concerns, primarily due to its poor management efficiency and profitability ratios. The company’s Return on Equity (ROE) stands at a meagre 0.45%, signalling very low profitability generated per unit of shareholders’ funds. This figure is notably weak for a company of its scale and sector, indicating operational challenges and inefficiencies in capital utilisation.

Moreover, the latest quarterly financials for Q2 FY25-26 reveal a sharp deterioration in profitability. Profit Before Tax (PBT) excluding other income plunged to a loss of ₹145.44 crores, representing a staggering fall of 118.5% compared to the previous four-quarter average. Net losses deepened further with a Profit After Tax (PAT) of ₹-50.38 crores, down 201.4% from the prior average. These figures underscore the company’s ongoing struggles to generate positive earnings despite its sizeable market presence.

Valuation and Market Capitalisation Context

Delhivery’s market capitalisation currently stands at ₹29,857 crores, making it the second largest company in the transport services sector after Container Corporation of India. It accounts for 18.62% of the sector’s total market cap, with annual sales of ₹9,423.19 crores representing 11.53% of the industry’s revenue. Despite this scale, the stock is trading at valuations that appear risky relative to its historical averages.

The company’s Price/Earnings to Growth (PEG) ratio is 0.7, which on the surface suggests undervaluation given its earnings growth. However, this is tempered by the negative operating profits and the recent financial setbacks. The debt-equity ratio remains moderate at 0.48 times as of the half-year mark, indicating manageable leverage but not without risk given the earnings volatility.

Financial Trend: Mixed Signals Amid Negative Quarterly Performance

While the recent quarterly results have been disappointing, Delhivery’s longer-term financial trends present a more nuanced picture. Operating profit has grown at an annualised rate of 22.52%, indicating some underlying business momentum. Additionally, the company’s profits have surged by 339.4% over the past year, a remarkable increase that contrasts with the latest quarterly losses.

Institutional investors hold a significant 83.56% stake in Delhivery, reflecting confidence from well-resourced market participants who typically conduct thorough fundamental analysis. This high institutional ownership can provide some stability and support for the stock, even as short-term financials remain under pressure.

From a returns perspective, Delhivery has outperformed the broader market substantially over the last year, delivering a 26.75% return compared to the BSE500’s 8.76%. However, over a three-year horizon, the stock’s 30.26% return lags the Sensex’s 37.97%, suggesting that recent gains may be more cyclical than structural.

Technical Analysis: Downgrade Driven by Sideways Momentum and Bearish Indicators

The downgrade to Strong Sell was primarily triggered by a shift in the technical grade from mildly bullish to sideways, signalling a loss of upward momentum. Key technical indicators paint a mixed but cautious picture:

• MACD: Weekly readings are bearish, while monthly indicators remain mildly bearish, suggesting persistent downward pressure.


• RSI: Both weekly and monthly Relative Strength Index readings show no clear signal, indicating a lack of strong directional momentum.


• Bollinger Bands: Weekly trends are mildly bearish, whereas monthly trends show mild bullishness, reflecting short-term volatility within a broader sideways range.


• Moving Averages: Daily averages remain mildly bullish, but this is insufficient to offset the weekly and monthly bearish signals.


• KST (Know Sure Thing): Weekly readings are bearish, while monthly readings are bullish, further highlighting the conflicting technical signals.


• Dow Theory: Weekly data shows no clear trend, and monthly data is mildly bearish, reinforcing the sideways momentum.


• On-Balance Volume (OBV): Weekly shows no trend, but monthly OBV is bearish, indicating selling pressure over the longer term.

These technical factors collectively contributed to the downgrade in the Mojo Grade from Sell to Strong Sell, with the overall Mojo Score now at 28.0. The downgrade reflects a cautious stance given the lack of clear bullish momentum and the presence of bearish signals across multiple timeframes.

Price and Market Performance Snapshot

Delhivery’s stock price closed at ₹399.00 on 27 January 2026, up 2.99% from the previous close of ₹387.40. The stock traded in a range between ₹380.60 and ₹402.00 during the day. Its 52-week high remains ₹489.95, while the 52-week low is ₹236.80, indicating significant price volatility over the past year.

Short-term returns show a mixed picture: a 3.7% gain over the past week outperformed the Sensex’s 0.39% loss, but the stock declined 2.03% over the past month, though this was still better than the Sensex’s 3.74% fall. Year-to-date, the stock is down 1.15%, yet this compares favourably to the Sensex’s 3.95% decline.

Summary and Outlook for Investors

Delhivery Ltd’s downgrade to Strong Sell reflects a convergence of factors that caution investors against holding or buying the stock at this juncture. The company’s weak profitability metrics and recent negative quarterly earnings highlight operational challenges that have yet to be resolved. Although the firm benefits from strong institutional backing and has delivered market-beating returns over the past year, the underlying financial health remains fragile.

Technically, the stock’s momentum has stalled, with multiple indicators signalling sideways to bearish trends. This technical deterioration, combined with valuation risks and inconsistent financial performance, justifies the more negative investment stance.

Investors should closely monitor upcoming quarterly results and any strategic initiatives by management aimed at improving profitability and operational efficiency. Until then, the Strong Sell rating suggests a cautious approach, favouring alternative opportunities within the transport services sector or broader market.

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