Diversified Services: The company offers a range of services on its platform, including grocery delivery, parcel delivery, fruit and vegetable delivery, and meat delivery, all designed to save consumer’s time.
Investment Thesis: The stock is priced at Rs.2,12,887 per share, with a Price-to-Sales (P/S) ratio of 1.0x. Quick commerce companies typically have a P/S ratio of around 1.0x.
The company has been experiencing a significant cash crunch in recent years. Recent filings with the Ministry of Corporate Affairs reveal that Dunzo has delayed payments of over ₹40 crore to more than 100 vendors, including related entities, due to insufficient funds. Besides delaying vendor payments, Dunzo has postponed employee salary payments and implemented major cost-cutting measures over the past year to manage its financial difficulties. Notably, Invoice Discounters of Dunzo Digital, one of its creditors, has filed for bankruptcy against the business. An application under the Insolvency and Bankruptcy Code (IBC) has been submitted to the National Company Law Tribunal (NCLT) to initiate this action
Since Dunzo is currently not making any profits and relying on external funding to operate its business, we recommend a strong sell on this stock.