Shares of Delhivery fell 14% to Rs 479 per share on BSE on October 20 after the logistics company said it expected shipments for the rest of FY23 due to high inflation, average user spending and a flat or fall in total active shoppers’ volume will grow moderately for ongoing festivals.

As Delhivery is one of the major players in third-party e-commerce logistics, the company’s guidance for flat festive sales and modest growth in FY23 is expected to weigh on the outlook for the broader e-commerce sector.

In a shareholder letter to the exchange on its September quarter results, Delhivery said shipments in its Supply Chain Services (SCS) and Truckload (TL) businesses were down sequentially due to seasonality in customer business. The company’s shares are currently trading below its IPO price of Rs 487 per share.

“However, both businesses saw substantial double-digit growth compared to a year ago. Despite the slowing global economy and lower earnings from air and ocean freight, our cross-border business also showed steady growth,” the letter said. But the company did not share any operational metrics, saying it would share the numbers once the board approved the quarterly audit results.

“Industrial output also remained weak in the first two months of the quarter. Despite challenging market conditions, our market position remains strong due to our structural cost advantage, network scale and capacity investments,” the company said.

“Going forward, we keep an eye on the market sentiments. We have made substantial capacity investments in FY22 and early FY23 to maintain our current growth rate and only expect new mega-gateway and sorter decisions by the beginning of FY 24,” it added. In the June quarter (Q1), Delhivery’s operating income fell 16% quarter-on-quarter to Rs 1,746 crore, while sales in the largest e-commerce segment by revenue fell amid rising inflation.