Should you buy, sell or hold Delhivery post Q4 earnings?

After e-commerce-focussed logistics company Delhivery reported Q4 earnings broadly in line with the estimates, top brokerages were largely bullish on the counter. While Morgan Stanley remains ‘Overweight' on the stock, Kotak Institutional Equities has a 'Buy' rating on the counter. BofA has a 'Neutral' stance on Delhivery.

The company reported a 10% decline in its January-March quarter revenue at Rs 1,859 crore from the year earlier and its net loss widened to Rs 158 crore from Rs 119 crore. Expenses fell 6% to Rs 2,107 crore from Rs 2,254 crore, it said in an exchange filing. The company said its adjusted Ebitda turned positive in the quarter at Rs 6 crore compared to Rs 67 crore loss in Q3FY23.

The company has seen senior-level exits in recent months.

This is what top brokerages are saying about the stock:

Morgan Stanley: Overweight | Target: Rs 370
Morgan Stanley remains 'Overweight' on the stock and has a price target of Rs 370. The revenue missed our estimate slightly. Adjusted EBITDA turned positive versus our expectation of a loss. Management expects business momentum to continue in FY24 as well. Fall in express yields was a negative surprise.

BofA: Neutral | Target: Rs 380
Bank of America has a 'Neutral' stance on the stock. The brokerage sees a continuation in the margin improvement. The Q4FY23 results were stable; higher D&A leads to PAT miss while the PTL recovery is on track.

Kotak Institutional Equities: Buy | Target: Rs 410
We broadly retain estimates and increase FV to Rs 410 from Rs 395. Delhivery reported an in-line quarter on adjusted EBITDA, benefiting from improving QoQ volumes and high incremental gross margin. It highlighted improving market share in e-commerce logistics and position of strength in incremental PTL business contracts. The key positive surprise for us and for Delhivery was the pace at which its hubs are growing to the scale concomitant to starting tractor-trailers. A key monitorable would be the extent to which 3PL logistics endeavours of self-logistics firms can impact Delhivery’s e-commerce operations.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)