Logistics start-up Delhivery shares dropped by almost 19 per cent to hit an intraday low of Rs 382.75. The company said that this was due to high inflation it is witnessing subdued demand for its services.

"Market sentiment in Q2 continued to remain broadly unchanged from Q1. Consumer discretionary spending remained muted due to continuing high levels of inflation, with average user spends and total active shoppers remaining flat or lower during the ongoing festive season, as per the industry reports. Industrial output (IIP) also remained weak in the first 2 months of the quarter. In spite of the challenging market conditions, our market position remains strong owing to our structural cost advantages, network size and investments in capacity," Delhivery informed stock exchanges in a regulatory filing.

The company, however, added that its express parcel volumes remained stable during the second quarter driven by festive season sales, especially in the heavy goods category. 

"Overall service line volumes for the business grew in the high teens in Q2FY23 over a large base of the same quarter last year (Q2FY22). While the festive season sale surge in shipment volumes will spill over to Q3FY22 as well, we anticipate moderate growth in shipment volumes through the rest of the financial year," Delhivery said.

The company expects volumes to improve going ahead as it hope inflationary pressure to ease.

"Going forward we remain watchful of the market sentiments. We have made sufficient capacity investments in FY22 and early FY23 to sustain our current rate of growth and expect new mega-gateway and sorter decisions only by early FY24. As inflationary pressures and service disruptions due to monsoon ease across the country we expect improvement in volumes, revenue and service margins going forward," the logistics start-up added.

As of 11:24c am, Delhivery shares traded 15 per cent lower at Rs 398, underperforming the Sensex, which was up 0.5 per cent.