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Delhivery Limited’s stock closed at ₹330.55 on November 14th 2024, reflecting a modest increase of 0.08%. Over the last year, Delhivery’s share price has been under pressure, marking a decline from its February high of ₹488.
The 52-week low of ₹328 further underscores the challenging environment for the logistics giant. With a negative YTD return of 15.08%, the stock has trailed behind the S&P BSE SENSEX over longer periods, with a 5-year return of -33.25% compared to the index's 43.53%.
In Q2FY25, Delhivery posted a consolidated net profit of ₹10 crore, a significant turnaround from the ₹103 crore loss recorded in Q2FY24. However, the profit was down 81% from ₹54 crore reported in the preceding quarter. Revenue from operations rose 13% year-on-year (YoY) to ₹2,190 crore, driven by steady growth across its core business segments. On a sequential basis, revenue increased marginally by 0.8%.
The company’s EBITDA rose to ₹57 crore compared to a loss of ₹16 crore in Q2FY24, indicating improved operational efficiency. The EBITDA margin stood at 2.6%, a sign of moderate recovery in profitability despite ongoing cost pressures.
Key revenue drivers included:
Express Parcel Revenue: ₹1,298 crore, up 7% YoY, with shipment volumes rising 3% to 185 million.
Part Truckload Revenue: Up 27% YoY, reflecting strong demand for larger freight shipments.
Delhivery’s swing to profitability in Q2FY25 marks a critical milestone in its recovery journey. The company has continued to strengthen its core business areas, supported by a resilient logistics sector. Despite the challenging economic landscape, Delhivery managed to expand its revenue base and improve efficiency, showcasing the effectiveness of its strategic initiatives.
Delhivery’s share price has been bearish since its February high of ₹488, reflecting investor skepticism amid macroeconomic uncertainties and performance challenges. Recently, the stock broke below the critical ₹355 support level, with the next support possibly at ₹320.
Resistance: ₹355
Immediate Support: ₹320
Long-Term Support: ₹290 (2023 January low)
A failure to hold the ₹320 support could result in further declines, potentially testing the ₹290 mark. Conversely, if the price stabilizes, a recovery toward the ₹355 resistance level may be possible.
Delhivery’s return to profitability and 13% YoY revenue growth highlight a positive trend. However, the company faces significant challenges, including weak margins and a bearish stock trend. Investors should weigh these factors carefully:
Buy: For long-term investors confident in Delhivery’s recovery and growth potential, particularly in the e-commerce-driven logistics sector.
Hold: For existing shareholders, waiting for stabilization at current support levels might be prudent.
Sell: Short-term traders or those averse to risk might consider exiting due to the stock’s bearish technical outlook.
Delhivery’s Q2FY25 results present a mixed picture: a return to profitability coupled with a bearish stock performance. While its financial recovery is encouraging, investors must closely monitor its ability to sustain growth and manage costs effectively.
The stock remains under pressure, and future performance will hinge on Delhivery’s ability to navigate market challenges and deliver consistent operational improvements.
