Active Stocks
Fri Sep 22 2023 15:58:38
  1. Tata Steel share price
  2. 126.7 -0.86%
  1. HDFC Bank share price
  2. 1,529.2 -1.57%
  1. State Bank Of India share price
  2. 598.1 1.67%
  1. Power Grid Corporation Of India share price
  2. 199.1 -1.34%
  1. Tata Motors share price
  2. 621.1 -0.93%
Business News/ Markets / Stock Markets/  Delhivery shares: Should you buy, sell, hold as Q3 loss widens?

Logistics firm Delhivery net loss widened to 195.7 crore for the third quarter ended December 2022 (Q3 FY23) as compared to a loss of 127 crore in the yea-ago quarter. Its revenue also declined about 9% to 1,823 crore as against 2,019 crore year-on-year (YoY).

“Q3 EBITDA loss was lower than expectations as gross profit was better and other expenses lower. Management exhibited confidence on reducing losses further. We believe current price factors less than 10% express parcel growth in the next 3-5 years vs 30%+ levels seen in the past. We believe B2B (Spoton), operating leverage and low e-commerce penetration driven growth are being underestimated," said global brokerage Jefferies which has maintained its Buy tag on Delhivery shares with a target price of 570.

Dominant in B2C, Delhivery is making a mark in B2B through its Spoton acquisition. Integration issues and slowdown at its e-commerce clients in the next 9-12 months are headwinds, the note stated, adding that the company should break even in FY25E-26E with management’s focus on profitability in an industry with a strong growth tailwind.

“Delhivery’s Q3FY23 results were a mixed bag. With SpotOn’s integration, margin improvement met expectations, but express parcel shipment volume growth was sluggish at 6% QoQ/flat YoY. That said, PTL volumes are showing momentum since Jan-23 and the midmile optimisation should aid margin expansion. Growth moderation in Express currently and the FY24E uncertainty are the key variables," said brokerage Nuvama Research.

It has retained ‘HOLD’ hold tag with a revised target price of 361 (earlier 415), as a 44% stock crash in past six months largely discounts this damage to earnings roadmap. “Delhivery’s story and valuation relies heavily on e-com growth of 15–20% or above for a decade or so. For now, Delhivery believes it can achieve 15–20% in FY24E, but this will remain a key stock price determinant."

Delhivery is fully-integrated supply chain services company in the domestic and international space. The stock is down about 42% since its market debut in May 2022.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Updated: 13 Feb 2023, 08:29 AM IST
Next Story
Recommended For You

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started
Switch to the Mint app for fast and personalized news - Get App