Delhivery share price dropped 6.6 per cent to a low of Rs 295.8 per share after analysts cut their earnings estimate on the stock, following weak results for the December quarter (Q3) of the current financial year (FY25).
Q3 is a seasonally strong quarter due to festive pick-up in demand.
Delhivery reported a net profit of Rs 25 crore, clocking a growth of 113 per cent year-on-year (Y-o-Y).
The logistics company's revenue, meanwhile, rose 8.4 per cent over the previous year to Rs 2,378.3 crore.
Earnings before interest, taxes, depreciation and amortisation (Ebitda), however, slipped 6.2 per cent Y-o-Y to Rs 102.4 crore with the margin shrinking to 4.3 per cent from 5 per cent.
Delhivery share price outlook: How brokerages see Q3 results
PL Capital ' Hold ' Target price: Rs 340
This was the fourth straight quarter wherein Delhivery s B2C volume growth was in low-single digits.
However, the part-truck load (PTL) business continues to report steady performance with volume/yield growth of 16.4 per cent/4.7 per cent, respectively.
Further, while Meesho s insourcing exercise has stabilised, near-term growth headwinds are likely to persist as competition among 3PL players has now intensified. We cut our FY25E Ebitda estimates by 9 per cent amid eruption of cost led challenges in the quarter.
JM Institutional Securities ' Buy ' Target price: Rs 380
Q3 was a seasonally strong quarter for Express Parcel due to the festivities.
But the company failed to deliver strong growth due to consumption slowdown along with rise of quick commerce and insourcing at Meesho.
With EPS volumes rising just 2.5 per cent Y-o-Y, along with a sequential dip in PTL tonnage, Delhivery missed consensus earnings estimates.
Moreover, due to increased rent on account of the Bengaluru facility going live and vehicle rental expenses rising due to higher volumes during the first week of the festival season, margin expansion was also subdued.
We cut revenue estimates by 3-4 per cent.
ICICI Securities ' Buy ' Target price: Rs 500
Management highlighted that insourcing of Valmo has eroded the profitability of other players in the express parcel segment.
However, Delhivery's profit share of the industry improved in Q3FY25 compared to Q2FY25.
Capital inflow in the sector remains limited, and the management expects competitors to raise prices to maintain solvency, which could benefit Delhivery by driving revenue growth.
It expects express parcel margin to stabilise at 17-20 per cent in the coming quarters, driven by a shift from spot contracts to locked-in rates in respect to vehicle rental expenses and improved PTL volumes.
Emkay Global Financial Services ' Buy ' Target price: Rs 425
Improving PTL volumes without sacrificing realisations and benefits of operating an integrated network should aid the margin trajectory in the long term.
Strong net cash position (?5,500 crore) and reducing capex intensity (5 per cent in FY26) are likely to help the company ward off industry headwinds better than competitors.
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