Delhivery shares may rally 42% according to this analyst who also highlights three key risks

Shares of logistics solutions provider Delhivery Ltd. may rally as much as 42% over the next 12 months, according to brokerage firm UBS.

UBS has initiated coverage on Delhivery with a “buy” recommendation and a price target of ₹550. The price target implies a potential upside of 42% over the next 12 months. UBS’ price target is also the second-highest for Delhivery on the street, following Jefferies, whose analysts see the stock crossing the mark of ₹600.

The brokerage said that its “buy” recommendation is driven by long-term synergistic growth, a strong moat and competitive leadership and strong profitability potential.

Among the key risks that UBS has highlighted include competition, customer concentration and its multiple investors and co-founders.

Delhivery has zero promoter holding with entire shareholding with public shareholders and mutual funds.

The stock was listed in May last year with an IPO price of ₹487. The stock is currently up 16% so far this year but continues to trade below its issue price.

Besides Delhivery, UBS also initiated coverage on Adani Ports with a “neutral” recommendation and a price target of ₹1,175. The brokerage said that it sees limited upside for the stock post its recent run along with the moderate sector growth.

Shares of Adani Ports are up 30% over the last one month.

UBS has initiated coverage on Container Corporation with a “sell” rating and a price target of ₹770. The brokerage said it is cautious about market share losses, high valuations, and a weak exim cycle.

It also said that the Exim segment, which contributes to more than 80% of CONCOR’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), remains weak.