Delhivery shares trading below Rs 300 mark after two years, can they recover? 

Shares of logistics services firm Delhivery Ltd hit 52-week low for the second straight session on Tuesday after Q3 earnings. With today's correction, Delhivery shares are trading below the Rs 300 mark after two years. On February 13, 2023, the stock hit an intraday low of Rs 298.15. The stock has traded above the Rs 300 mark since then except in the previous session. It hit a 52-week low of Rs 295.80 on Monday. 

In the current session, Delhivery stock slipped over 2% to Rs 290.30 against the previous close of Rs 296.65 on BSE. Market cap of the firm fell to Rs 21,600 crore. The stock touched a 52-week high of Rs 485 on February 27, 2024. 

A total of 0.25 lakh shares of the firm changed hands amounting to a turnover of Rs 73.37 lakh on BSE.  HSBC has a buy call on Delhivery with a price target of Rs 400. 

HSBC trimmed its EBITDA estimates by c12-13% over FY26-27 estimates. The brokerage said the company missed FY25 Q3 revenue growth as well as profitability missed expectations on muted growth in Express Parcel business

The management highlighted industry profit pool has reduced & remains hopeful of consolidation, HSBC added. 

Kotak Equities has a buy call on the stock with a price target of Rs 420. 

"Delhivery reported an in-line tepid print in express parcel volumes. Adjusted EBITDA print halved yoy on account of an unplanned uptick in intracity vehicle rental costs, cost redundancies linked to the recently commissioned mid-mile capacities and continued erosion of the profit pool of 3PL players on higher insourcing. PTL volume growth and profitability fared well, and Delhivery expects the pace of uptick in both to strengthen," said Kotak. 

The brokerage trimmed its service EBITDA estimates by 11-12% and lower FV by a similar quantum to Rs 420. The current market price factors in low-double-digit decadal volume CAGR for express parcel volumes, notwithstanding the sharp potential share gains on the anvil.

Nuvama said Delhivery reported a weaker-than-expected Q3FY25 performance on the back of industry headwinds and softness in e-commerce volumes. It also trimmed its price target to Rs 380 against Rs 400.  

"We are cutting FY25E–27E EPS by up to 39% to reflect the weak Q3 performance. We reckon revenue/EBITDA CAGR of 14%/18% over FY24–27E, yielding a targte price of Rs 380 (earlier Rs 400); maintain ‘BUY’. We are cutting FY25E–27E EPS by up to 39% to reflect the weak Q3 performance. We reckon revenue/EBITDA CAGR of 14%/18% over FY24–27E, yielding a TP of Rs 380 (earlier Rs 400); maintain ‘BUY," said the brokerage. 

In terms of technicals, the relative strength index (RSI) of Delhivery stock stands at 30.5, signaling it's trading neither in the oversold nor in the overbought zone. The stock has a beta of 1, indicating average volatility in a year. Its money flow index (MFI) has slipped below 30 to 26.2 which indicates the stock is oversold and is likley to rebound. 

Shares of Delhivery are trading lower than the 5 day, 10 day, 20 day, 50 day, 100 day, 150 day  and 200 day moving averages.   

Profit zoomed 114% to Rs 25 crore in Q3 against a profit of Rs 11.7 crore in the corresponding quarter of the previous fiscal. Revenue from operations climbed 8.4% to Rs 2378.3 crore in Q3FY25 against Rs 2194.4 crore revenue in Q3FY24.

At the operating level, EBITDA fell 6.2% to Rs 102.4 crore in the last quarter against Rs 109.2 cr in Q3 FY24. 

EBITDA margin came at 4.3% in Q3 compared to 5% in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation.

Delhivery is engaged in providing a full range of logistics services, including delivery of express parcel and heavy goods, PTL freight, TL freight, warehousing, supply chain solutions, cross-border Express, freight services, and supply chain software.