Blue Dart Express Ltd. share price target

August MPC Minutes: Focus on growth to continue. BDE: Buffeted by headwinds

We recently met the management of Blue Dart Express (BDE) and present the key takeaways in this report.

Focus on network expansion, tapping growing industries Amid a challenging economic and competitive scenario, Blue Dart is focusing on expanding its reach, improving transit times and targeting higher revenue from small towns and SME segment. It has already reached ~18000 pin codes and expects to reach ~19200 pin codes across India in a few months. The widespread infrastructure, push towards automation and building a strong IT network will enable the company to have a competitive...

As per the management, BlueDart reached ~18000 pin codes & expects to reach ~19200 pin-codes across India in few months. With this feat, it expects to remain the preferred logistics partner in all Tier 1, 2, 3, 4 cities. The company has also undertaken an investment programme for two to three years that will make it ready for the next leg of growth, which includes aggressive reach expansion, focus on emerging markets, sectors and SMEs etc. The widespread infrastructure and a push towards automation and building a strong IT network will enable the company to have a competitive...

Revenues grew 21% YoY to | 855 crore (I-direct estimate: | 775 crore). Both B2B and B2C continued to show good traction during the quarter, post double digit growth in H1FY19 EBITDA margins contracted 438 bps YoY to 7% (I-direct estimate: 6%)...

ICICI Securities Ltd | Retail Equity Research Revenues grew 14% YoY to | 798 crore (I-direct estimates: | 700 crore). Both the B2B and B2C continued to show good traction (high double digit) during the quarter, post a double digit growth in Q1 EBITDA margins contracted 590 bps YoY to 5% (I-direct estimate: 8%) with an absolute EBITDA de-growth of 48% YoY to | 40 crore (I-direct estimate: | 59 crore). EBITDA margins were below I-direct estimates mainly due to higher freight handling and servicing cost (67.5% vs. Idirect estimate of 65%)...

EBITDA margins contracted 80 bps YoY to 6.1% (I-direct estimate: 10%) with absolute EBITDA de-growth of 3% YoY to | 45 crore (Idirect estimate: | 70 crore). EBITDA was below I-direct estimate mainly due to higher freight handling and servicing cost and also higher employee costs (due to implementation of Minimum Wages Act) Adjusted PAT de-grew 5% to | 22 crore (I-direct estimate: | 39 crore), mainly due to a weak operational performance Continued push towards building strong technology, infra network BlueDart has undertaken an investment programme for two to three years...

ICICI Securities Ltd | Retail Equity Research Revenues grew 6% YoY to | 717 (I-direct estimate: | 700 crore). Market sentiment remained sluggish due to a challenging economic environment, slowing business growth, intense competitive pressures in B2B and B2C segments, introduction of GST, initial hiccups in ewaybill implementation, etc. Though the transition period is expected to continue for some time into the year, as per the management, BlueDart remains committed to sustaining its strategic thrust to maintain market leadership in all segments...

ICICI Securities Ltd | Retail Equity Research Revenues de-grew 2.1% YoY (flattish QoQ) to | 704.6 (I-direct estimates: | 689.8 crore). The management believes that implementation of GST and e-way bill, though being game changers in long term, pose a set of intractable changes in the short term. Though the transition period is expected to continue for sometime into the year, Bluedart remains committed to sustain its strategic thrust to maintain market leadership in the express delivery market...

Revenues grew 6% YoY (up 5.4% QoQ) to | 702.8 crore (I-direct estimate: | 696.4 crore). The B2C segment continued to remain subdued, contributing 21-22% of overall revenues while the remaining contribution (78-79%) was from B2B. Utilisation levels for the quarter were at 83-85% compared to 80% in Q1FY18 Post de-growth for four consecutive quarters, EBITDA showed signs of revival with a marginal growth of 3% YoY to | 76.7 crore (I-direct estimate: | 66.2 crore) reflecting operating synergies. The impact of...