Shares of Delhivery Ltd dropped as much as 12 per cent during the trading session on Tuesday after the company slipped to red in the March 2024 quarter on a sequential basis (QoQ). Also, the stock was hammered by the resignation of the key managerial personnel. However, brokerage firms remain mostly positive on the counter post earnings.
Delhivery posted a loss of Rs 68.5 crore in the quarter ended 31 March, 2024, down 57 per cent on a year-on-year (YoY) basis from a loss of Rs 159 crore in the corresponding period last year. However, the logistics company posted a surprise profit of Rs 11.7 crore in the December quarter, its first ever since at least 2021.
Revenue from operations increased 12 per cent YoY to Rs 2,076 crore in the January-March 2024 period, compared with Rs 1,860 crore in the corresponding period of the previous year. Ebitda for the fourth quarter rose to Rs 46 crore versus just Rs 13 crore in the same quarter of last year, said the company.
For the entire financial year 2023-23, revenue from services stood at Rs 8,142 crore, a growth of 13 per cent from Rs 7,224 crore recorded in FY23. Similarly, loss after tax narrowed to Rs 249 crore in FY24 from Rs 1,008 Cr in FY23. The company also turned operationally profitable for the entire FY24 with an Ebitda of Rs 127 crore in FY24 from an EBITDA loss of Rs 452 crore in FY23.
The company informed the exchanges through an exchange filing, that its Executive Director and Chief Business Officer (CBO), Sandeep Kumar Barasia, has resigned and July 1 will be his last working day. After over nine years with the company, Barasia is leaving for personal reasons, the filing added.
Following the announcement of Q4 results, shares of Delhivery tumbled 11.92 per cent to Rs 383.90 on Tuesday, compared to its previous close at Rs 435.90. The total market capitalization of the logistics solution provider slipped below more than Rs 30,000 crore. The latest target price from brokerage firms suggest up to 42 per cent upside from today's low.
Delhivery's miss was attributed to flat express parcel volumes, driven by externalities not anticipated in FY2025—insourcing share for Meesho has started to stabilize and key customers have raised funding for growth, said Kotak Institutional Equities. It stands on having over 100 per cent of the profit pool in Express Parcel and peers being hit by externalities much more, Kotak said.
"Results were solid on other metrics, key among which were resilient margin in Express Parcel, healthy growth at improving margin. Capex appears to peak and working capital has improved, boosting the case for cash break even in FY2026. We cut Ebitda estimates by 15 per cent and 12 per cent for FY2025 and 26, respectively and revise DCF-based fair value to Rs 545," Kotka added with a 'buy' tag.
Delhivery remains net debt free and a favourable working cap position, said Prabhudas Lilladher. Delhivery is expected to maintain an edge over competitors given its unique low cost business model (B2B+B2C in same infra); continued investments in building infrastructure (tractor trailers, automated hubs etc); focus on cost optimization; and strong proprietary tech infra, it said.
"The strong growth in the PTL network is leading to a continuous improvement in asset utilization. The management expects continued volume growth in the segment in FY25E. We change our stance to 'buy' rating with a target of Rs 530 based on DCF, on the back of faster than expected recovery in the PTL margins," it said.
Delhivery reported higher-than-expected losses for the quarter compared to profits in the previous quarter. Express parcel shipment declined 2 per cent YoY to Rs 1,760 crore due to softness in online consumption during the quarter. Ebitda margin in the express parcel segment was 17.6 per cent, said Nuvama Institutional Equities.
"Losses had been narrowing but still persist. Profitability remains the key for the stock price to start an upward trajectory. We have increased our estimates by 1-6 per cent over FY25E/26E with a revised DCF based target price of Rs 463, from Rs 450," it added, retaining a 'hold' rating.
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