“Formalisation of the logistics sector is a multi-year theme that should play out. We adjust our numbers for lower international cargo volume growth seen in 3QFY23, but believe that follow-ups to the National Logistics’ Policy (NLP), continuing GST-driven organised players’ share gain, Dedicated Freight Corridor (DFC) traffic increase,
privatisation should play out in 2023,” Jefferies said.
Concor,
and Delhivery are its top picks in the transport and logistics sector.
Adani Ports
Jefferies said Mundra’s market share gain success story should be replicated across the acquired ports. “Adani Ports is continuing to move from strength to strength, with market share moving up to 22% from 14% in FY15 and expected to be 31% by FY25E. As core port EBITDA growth remains upward of double digits, backed by volumes, we remain positive on the stock,” it said.
The base case scenario shows an upside potential of 25% to Rs 995 while in the upside scenario, the stock can rally up to Rs 1,330.
The Adani Group stock which has lost over 10% of its value in the last one month is up around 4% in the last one year period.
Delhivery
The brokerage believes current price levels factor 6-8% express parcel growth in the next 3-5 years vs 25%+ levels seen in the past. “We believe B2B growth (Spoton), cost rationalisation and low e-commerce penetration are being underestimated,” it said.Considering higher investor risk perception, particularly on the B2C growth, it has revised its target price lower to Rs 570 (v/s Rs700), factoring a higher cost of equity of 13% vs 12% earlier.
Shares of Delhivery are trading around 35% below their IPO issue price of Rs 487.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
