Delhivery down 3% as Co slips into red in Q4 after reporting profit in Q3

Delhivery stock price dipped 3.2 per cent to Rs 439.25 apiece on the BSE on Saturday, during the special trading session, after the company slipped into losses again in the March quarter (Q4FY24).

At 10:00 AM, Delhivery stock price was at day's low as against the benchmark S&P BSE Sensex's 0.02 per cent gain.

During Q4FY24, Delhivery posted a loss of Rs 68.5 crore as against a profit of Rs 11.7 crore in the December quarter (Q3FY24). On a year-on-year (Y-o-Y) basis, however, the loss narrowed down 57 per cent from Rs 159 crore posted in Q4FY23.

On the revenue front, Delhivery reported revenue of Rs 2,076 crore in Q4FY24, up 12 per cent Y-o-Y from Rs 1,860 crore. Ebitda climbed to Rs 46 crore from Rs 13 crore Y-o-Y, with margins at 2.2 per cent (below Street estimates of 2.6 per cent), as gross margin expanded by 58bps.

 

Delhivery's revenue growth was driven by the partial truck load (PTL) and full truck load (FTL) segments (up 27 per cent and 60 per cent Y-o-Y, respectively) in Q4FY24. Despite Q4 being a seasonally-weaker quarter for the PTL industry, Delhivery saw continued improvement in PTL volumes (up 21 per cent Y-o-Y) on the back of improving service levels and strengthening sales force in Tier 2+ cities.

Express business, on the other hand, saw weakness due to seasonality as well as insourcing of volumes from a key customer (volumes down 12 per cent/2 per cent Q-o-Q/Y-o-Y, respectively).

"Delhivery's integrated offerings, tech investments, and scale advantages have allowed it to gain market share in the PTL segment along with fortifying its leadership position in the 3PL Express market. With focus on ramping up other businesses like Supply chain services, Delhivery will not only diversify its revenue streams but strengthen its moat of being the lowest cost operator, in our view," said analysts at Emkay Global Financial Services.

The brokerage, however, has cut its revenue/Ebitda estimate by 1 per cent and 5 per cent for FY25, and 2 per cent and 8 per cent in FY26, respectively, factoring in the advent of in-sourcing by a key customer in the Express segment.

"We, however, continue to expect the company to turn PAT positive in FY25, as tapering capex intensity and net cash balance sheet help soften the blow on volumes in the short term," it added. The brokerage has a 'Buy' rating with a target price of Rs 500.