Shares of Delhivery Ltd. recovered all losses and closed higher on Monday, after its quarterly earnings lagged analyst estimates.
"Delhivery reported a miss driven by weak PTL volumes and a related loss shipment expense uptick that negated a higher-than-expected improvement in cost structure," Kotak Institutional Equities said in a note.
The logistics service provider reported a 9% miss in revenues and a "more relevant" 6% miss in margin-earning revenues that include express parcel and part-truckload businesses, the brokerage said.
Delhivery Q3 Consolidated Earnings Highlights (YoY)
Revenue from contracts with customers fell 9% to Rs 1,823.84 crore vs Rs 1,995.04 crore, as compared to an estimate of Rs 2,056 crore.
Net loss widened to Rs 195.65 crore vs net loss of Rs 126.52 crore. Analysts had forecast it at Rs 169.43 crore.
Ebitda loss stood at Rs 73.27 crore vs Ebitda profit of Rs 54.18 crore.
The scrip closed 0.97% higher at Rs 318.5, after declining as much as 5.5% intraday. The benchmark Nifty 50 closed 0.48% lower.
The total traded quantity stood at 3.5 times the 30-day average volume.
Of the 18 analysts tracking the stock, 13 maintained 'buy,' three suggested 'hold,' and two recommended 'sell.' The 12-month return potential of the stock stood at 28.8%, according to Bloomberg data.
Here's what analysts had to say:
Kotak Institutional Equities
Maintains a 'buy' rating with a fair of Rs 395 per share.
Cuts service Ebitda estimates by 3% for fiscal 2024–25.
Cuts revenue estimates by 6% for fiscal 2024–25.
Weakening macro will only improve Delhivery’s positioning, it believes.
Expects the company to raise its topline at CAGR of about 17% and improve margin to about 5.4%.
Expects a 440 basis point improvement in margin over fiscal 2022 through 2025, largely driven by service Ebitda margin expansion.
Expects a revenue CAGR of 18% for Delhivery over the financial years 2022–25.
Jefferies
Keeps a 'buy' rating on the stock with a price target of Rs 570, implying an 81% upside.
Believes current price factors less than 10% express parcel growth in the next three to five years vs 30% plus levels seen in the past.
Believes B2B, operating leverage, and low e-commerce penetration-driven growth are being underestimated.
Believes B2C-B2B mix to be 55-45 by fiscal 2026.
Expects fixed cost leverage to support margin turnaround on 19% fiscal 2022-26 revenue CAGR as variable cost pass through ability with market positioning sustains.
Volume and margin recovery should see it re-rate back to previous peaks.
ICICI Securities
Maintains a 'buy' rating on the stock and cuts its target price to Rs 425 from Rs 460.
Cuts fiscal 2024–25 revenue and Ebitda estimates by about 9% for each given slower-than-expected recovery in the part-truckload (PTL) segment.
Delhivery's revenue in Q3 was lower than estimates due to a delayed recovery in PTL volumes.
Pegs Ebitda margin profitability being pushed beyond Q4 and worsening revenue growth visibility in the medium term due to global headwinds as key risks.
Delhivery expects overall ecommerce shipments to grow 15–20% and the PTL market to grow 10–12% in a year.
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