Delhivery Shares Dip 12% Post-Q4 Earnings Miss; Analysts Stay Optimistic on DELH Stock

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• Shares of Delhivery experienced a significant drop, plunging 12 percent in intra-day trading following a reported net loss in Q4FY24.
• The logistics giant reported a loss of ₹96.2 crore this quarter, contrasting sharply with a profit of ₹52.97 crore in the previous quarter.
• “FY24 has been a crucial year for us where we delivered consistent service levels and significantly improved profitability,” stated Sahil Barua, MD and CEO of Delhivery.

Delhivery’s Q4 results show a narrowed year-on-year loss but a sequential drop in revenue, impacting stock prices.

Financial Performance and Market Reaction

Despite a year-on-year improvement in net loss from ₹117.5 crore to ₹96.2 crore, Delhivery’s quarterly revenue saw a decline of over 7 percent from the previous quarter. This financial volatility has led to a sharp decrease in its stock value, with shares falling close to 12 percent in a single day.

Strategic Moves and Future Outlook

Delhivery’s management remains optimistic, focusing on long-term capital investments and operational efficiencies. The company’s EBITDA improvement and revenue growth on a year-on-year basis highlight its potential for recovery and profitability. Furthermore, the board’s decision to venture into drone manufacturing and freight air transport services could diversify its revenue streams and enhance its competitive edge.

Brokerage Views and Stock Upgrades

Following the Q4 announcement, brokerage house Prabhudas Lilladher upgraded Delhivery’s stock to ‘buy’ from ‘accumulate’, setting a target price of ₹530, which implies a 38 percent upside potential. Analysts expect Delhivery to benefit from the e-commerce sector’s growth and maintain its market share, thanks to its robust business model and strategic investments.

Conclusion

Despite the immediate negative reaction in the stock market, Delhivery’s strategic initiatives and the positive outlook from financial analysts suggest a potential turnaround. Investors might see this dip as a buying opportunity, anticipating future gains from the company’s expansion into new business areas and overall market growth.

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