Delhivery shares crash 12% on higher-than-expected Q4 loss. Should you buy, sell or hold?
Delhivery Share Price: Delhivery shares plummeted 12% to Rs 383.90 as higher losses in Q4 disappointed investors. CLSA downgraded the stock to underperform, citing revenue growth below expectations. Despite some positive metrics, profitability concerns persist, with analysts revising target prices.
Shares of logistics services provider today fell 12% to the day's low of Rs 383.90 after the company reported higher-than-expected losses for the March quarter compared to in the previous quarter. Global brokerage downgraded the to underperform from buy and also reduced the target price to Rs 488 from Rs 600.While noting that Q4 growth was below expectations, CLSA said the express parcel revenue also declined on a QoQ basis, which was a negative surprise.
Delhivery reported a revenue growth of 12% YoY at Rs 2,076 crore in while after tax reduced to Rs 69 crore in the said quarter from Rs 159 crore in Q4 FY23. The earnings miss was attributed to flat Express Parcel volumes, driven by externalities not anticipated in FY2025—insourcing share for Meesho has started stabilising, and key customers have raised funding for growth.
"Results were solid on other metrics, key among which were resilient in Express Parcel, healthy growth at improving margin in PTL and price upmoves in SCM. appears to peak and working capital has improved, boosting the case for cash break even in FY2026," said while reducing EBITDA estimates by 15%/12% for FY2025/26 and revising DCF-based target price to Rs 545.
Delhivery expects capex-linked infrastructure to come down in FY2025 while vehicle capex will remain stable.
say profitability remains the key for the stock price to start an upward trajectory.
"After a temporary ray of green in the previous quarter, the company continued reporting losses in the current quarter and in FY24. Though the trajectory to profits is getting delayed, the year should see profits. Demand recovery and sustaining margins across segments shall be key monitorables. We are raising estimates by 1–6% in FY25E/26E with a based target price of Rs 463," said.
has upgraded the rating to buy from accumulate and also raised the target price from Rs 510 to Rs 530 on the back of a faster-than-expected recovery in the PTL margins.
"Delhivery is expected to maintain an edge over competitors given unique low-cost business model (B2B+B2C in same infra), continued investments in building infrastructure (tractor trailers, automated hubs etc), focus on cost optimisation and strong proprietary tech infra," said Harshal Mehta of Prabhudas.
In the meantime, has also announced the resignation of the company's Executive Director and Chief Business Officer Sandeep Barasia.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Source: Stocks-Markets-Economic Times
