A new kind of service manOn Friday, Delhivery will report its earnings for the period that ended on March 31, 2023. Analysts expect the company to report adjusted positive EBITDA for the first time since it opened on Dalal Street. It might be possible to use Delhivery as a model to play the growth of e-commerce in India.
Analysts expect the company’s sales to change by a single number from one year to the next and from one quarter to the next, but they expect the company’s net loss to shrink by a large amount from one year to the next. They said that spending on non-essentials stayed low in 4QFY23 because interest rates kept going up and inflation was high.
Given that Shopee had a big impact in the base quarter, ICICI Securities thought that the number of fast package shipments would go down 4% year over year and stay about the same quarter over quarter. It thinks that Delhivery has probably gained market share in the 3PL category, with PTL numbers continuing to rise as Delhivery keeps improving SLAs. One of the top picks from the sector by brokerages is the company Delhivery.
But PTL volumes may still be 30% below pre-acquisition levels. Overall, we think that Delhivery’s sales will go up 5.8% from quarter to quarter but down 6.8% from year to year, to Rs 1,930.5 crore. We think that Q4FY23 will be the first time since going public that Delhivery will have a positive adjusted EBITDA, with a net loss of Rs 124.6 crore. It said, “This could be a good sign for the stock.”
“We expect Delhivery’s fast parcel business to go down slightly from one quarter to the next because of the holiday shopping season in Q3FY23. On the other hand, the PTL business is likely to continue normalising after the Spoton integration is finished and grow 21% QoQ. Due to Shopee leaving in Q4FY22, fast package business will drop by 3% year-over-year, and PTL business is still 30% lower than it was in the same quarter last year, according to JM Financial.
With cost-optimization measures seen in Q3FY23, JM expects Delhivery to have high additional gross margins and improve adjusted EBITDA margin by 219 bps sequentially to reach -1.5%. It thinks that its total income will be Rs 2,071.8 crore, which is up 3.6% QoQ but down 8.8% YoY. Losses are expected to be Rs 119.1 crore, down 52.3% from the previous year, with an EBITDA profit of 3.9%.
In its sample report, ICICI Securities gave Delhivery a “buy” rating and set a target price of Rs 425 for the stock. JM Financial, on the other hand, gave Delhivery a “hold” rating and set a target price of Rs 350 for the stock.
