On Tuesday, Bernstein SocGen Group revised its stance on Delhivery Ltd (DELHIVER:IN) stock, downgrading it from Outperform to Market Perform while also reducing the price target to INR450.00 from INR520.00.
The adjustment in rating and price target reflects the firm's reassessment of the company's long-term prospects amid recurring challenges, particularly within the ecommerce sector.
The reason behind the downgrade, as cited by the analyst from Bernstein SocGen Group, stems from the company's ongoing difficulties in managing its business model, which has encountered new obstacles on a regular basis. These challenges have made it difficult for analysts to maintain a positive long-term outlook on Delhivery's stock.
In the words of the analyst, "The founder, Sahil Barua, and his team's inability to control their fortunes, with new challenges appearing every other quarter, makes this a tough model to take a long-term view." This statement encapsulates the concerns that have led to the revision of the stock's rating.
The recent issues in the ecommerce space have prompted Bernstein SocGen Group to revise its earnings expectations for Delhivery, leading to a price target that suggests limited returns for investors. The new price target of INR450.00 is a significant decrease from the previous INR520.00, indicating a shift in the firm's confidence in the company's stock performance.
Delhivery, which has been removed from Bernstein SocGen Group's India SMID Portfolio, now carries a Market Perform rating, suggesting that the stock is expected to perform in line with the broader market. This change signals a more cautious view of Delhivery's future growth and profitability.
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