Delhivery Q3 Review: Shares Pare Losses After Q3 Miss; Brokerages Cut FY25 Estimates

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:

• Maintains a 'buy' rating with a fair value 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.

• 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.

• 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.