Blue Dart Express
On the express way
The company is transforming itself from being just a courier company to a complete logistics company
| Buy | Blue Dart Express |
| BSE Code | 526612 |
| NSE Code | BLUEDART |
| Bloomberg | BDE@IN |
| Reuter | BLDT.BO |
| 52-week High/Low | Rs 857 / Rs 442 |
| Current Price | Rs 648 (as on 25th April 2008) |
Emergence of India as a "global hub" for manufacturing activities in sectors such as consumer durables, electronics, automobiles and their components and the retail boom have fuelled the demand for logistics in the country. These sectors are major consumers of supply chain solutions and outsourced logistics services and, are major growth drivers for the logistics sector. To capitalise on this huge opportunity, Blue Dart Express (Blue Dart) is transforming itself form being just a courier company to a complete logistics company. With experience and technological backing of DHL Express (which holds 81% equity stake), Blue Dart has strong chance of succeeding in this emerging field.
Today, the company is the market leader with 41.7% market share in the domestic air express segment, which grew from 40% at the beginning of 2007. An integrated air and ground network that involves over 1 million sq.ft. of facilities, 47 domestic warehouses and 10 express hubs, dedicated air services with a fleet of four Boeing 737-200 freighters and three B757-200 freighters are all part of the company's infrastructure.
Blue Dart is the only express company offering an unmatched delivery capability encompassing the entire spectrum of distribution services including express, air freight, ocean freight, supply chain solutions, freight forwarding, customs clearance, project handling and charters through its synergies with the 3 DHL Business Units-DHL Express, DHL Global Forwarding and DHL Exel Supply Chain. It offers secure and reliable delivery of consignments to over 17,600 locations in India and 220 countries worldwide.
'Freight services' include domestic, early morning airport-to-airport deliveries to the seven metros - Mumbai, New Delhi, Kolkata, Chennai, Bangalore, Ahmedabad and Hyderabad, serviced by Blue Dart aircraft. Blue Dart has ‘Interline’ agreements with twenty-six international airlines and bonded warehousing and transshipment facility. ‘Charters’ offer palletized capacity for carriage of urgent and large volumes to eighteen airports in India and four international airports in the region.
The Bangalore International Airport (BIAL) is one of the two greenfield airports scheduled to open in 2008. Blue Dart Aviation has been leased 9917.2 sq. mtrs. of land for a period of 10 years, extendable for another secondary term of 10 years, from BIAL to build and operate a state of the art airside/cityside integrated express terminal, the first of its kind in the country. The facilities will be operationalised along with operationalisation of BIAL.
The alliance of Blue Dart and DHL brings together two strong brands with premier offerings in the domestic and international express and logistics arena, and offer increasing future opportunities. DHL's market leadership in international air express complements its established domestic strengths and unique infrastructure. As part of the DHL Group, it gets access to the largest and most comprehensive express and logistics network worldwide, covering over 220 countries.
Solid financial performance
For the quarter ended March 2008, the company registered a solid 32% rise in its revenues to Rs 239.70 crore. OPM expanded by an impressive 260 basis points to 20.3% from 17.7% taking OP up by 52% to Rs 48.70 crore. PBT rose 95% to Rs 45.70 crore. Due to higher provision for tax (up 111% to Rs 15.00 crore) PAT was up 88% to Rs 30.70 crore.
For the CY 2007, the company registered 21% rise in its revenues to Rs 808.70 crore. OPM improved by 90 basis points from 14.9% to 15.8% taking OP up by 28% to Rs 127.90 crore. PBT was up 37% to Rs 106.60 crore and PAT was up 39% to Rs 69.90 crore.
In 2007, the company delivered 72 million domestic and 649,708 international shipments, weighing 191,800 tonnes.
Flying to new routes and adding new facilities for success
In 2007 Blue Dart added 43 new facilities and its total facilities across the country now stands at 257 with a fleet of over 4,800 vehicles, 40 domestic warehouses and 10 express hubs. Blue Dart also augmented its market share from 5.0% to 5.8% in the ground express space and plans to achieve market leadership in the next 5 years.
In 2007, Blue Dart added a new route to its aviation network Chennai-Delhi-
A recent addition to Blue Dart’s product portfolio is Import Express, which is the only importing service in India to offer a door-to-door facility for importing shipments from over 200 countries around the world.
The company is also exploring the opportunities for cold chain products related to perishable things.
During CY2007, Blue Dart augmented its fleet with a third Boeing 757-200 and the existing fleet now is 3 Boeing 757-200 and 4 Boeing 737-200, which have the unique capability to offer an unrivalled payload of 300 tonnes each night to 60 route connections across an expansive and diverse Indian geography.
To capitalise on the improving road infrastructure in the country, Blue Dart relaunched its ground express product, Dart Surfaceline. This is another step towards strengthening its capability of offering end-to-end express distribution services. The launch has enabled us to expand its reach to over 17,600 locations. This new feature-rich product is fortified with value add-ons ‘Freight on Delivery’ (FOD), ‘Demand Draft on Delivery’ (DOD) and ‘Freight on Value’ (FOV), etc.
Huge rise in capex shows the company’s confidence in growth prospects
The company incurred capex of Rs 48.7 crore in year 2007 and plans capex of about Rs 300 crore in the year 2008. The management estimates a substantial capex over next 5 years. The company plans to fund the capex from internal accruals.
The company plans to enhance capacities within the network by inducting additional dedicated air and ground carriage vehicles oven a period of time. The company also plans to expand into the ground transportation segment to seize the opportunities provided by the Golden Quadrilateral Project, North-South and East-West Corridor, and improving infrastructural landscape.
The Tier II and Tier III cities offer increasing opportunities for Blue Dart's Surfaceline. Owing to the growing affluence of consumers, these areas witnessed rapid growth in demand in the recent past. The emergence of SEZs, EPUs and IT parks also present exciting prospects for the company’s services.
Attractive valuation
In CY 2008, we expect the company to register sales and net profit of Rs 992.22 crore and Rs 97.85 crore respectively. On an equity of Rs 23.7 crore and face value of Rs 10 per share, EPS works out to Rs 42.9. The share price trades at Rs 648. P/E works out to just 15.7, which is very low for an industry leader with a strong MNC parent and which is transforming itself to fully capitalise on the growing opportunities in Indian logistics sector.
| | 0503(12) | 0512(9) | 0612 (12) | 0712 (12) | 0812 (12P) |
| Sales | 458.30 | 415.10 | 668.00 | 808.70 | 992.22 |
| OPM (%) | 17.9 | 17.8 | 14.9 | 15.8 | 17.3 |
| OP | 82.20 | 74.00 | 99.70 | 127.90 | 171.36 |
| Other inc. | 1.10 | 0.80 | 1.80 | 3.10 | 3.90 |
| PBIDT | 83.30 | 74.80 | 101.50 | 131.00 | 175.26 |
| Interest | 4.70 | 2.30 | 1.60 | 0.40 | 0.15 |
| PBDT | 78.60 | 72.50 | 99.90 | 130.60 | 175.11 |
| Dep. | 15.30 | 13.10 | 22.00 | 24.00 | 26.10 |
| PBT | 63.30 | 59.40 | 77.90 | 106.60 | 149.01 |
| EO | -3.20 | 6.80 | 0.00 | 0.00 | 0.00 |
| PBT after EO | 60.10 | 66.20 | 77.90 | 106.60 | 149.01 |
| Tax | 21.10 | 22.80 | 27.70 | 36.70 | 51.16 |
| PAT | 39.00 | 43.40 | 50.20 | 69.90 | 97.85 |
| EPS* (Rs) | 17.3 | 21.9 | 21.2 | 29.5 | 41.3 |
| * Annualised on current equity of Rs 23.73 crore; | |||||
| Blue Dart Express: Results |
| | 0803 (3) | 0703 (3) | Var. (%) | 0712 (12) | 0612 (12) | Var. (%) |
| Sales | 239.70 | 181.60 | 32 | 808.70 | 668.00 | 21 |
| OPM (%) | 20.3 | 17.7 | | 15.8 | 14.9 | |
| OP | 48.70 | 32.10 | 52 | 127.90 | 99.70 | 28 |
| Other inc. | 0.90 | 0.70 | 29 | 3.10 | 1.80 | 72 |
| PBIDT | 49.60 | 32.80 | 51 | 131.00 | 101.50 | 29 |
| Interest | 0.00 | 0.10 | -100 | 0.40 | 1.60 | -75 |
| PBDT | 49.60 | 32.70 | 52 | 130.60 | 99.90 | 31 |
| Dep. | 3.90 | 9.30 | -58 | 24.00 | 22.00 | 9 |
| PBT | 45.70 | 23.40 | 95 | 106.60 | 77.90 | 37 |
| EO | 0.00 | 0.00 | -- | 0.00 | 0.00 | -- |
| PBT after EO | 45.70 | 23.40 | 95 | 106.60 | 77.90 | 37 |
| Tax | 15.00 | 7.10 | 111 | 36.70 | 27.70 | 32 |
| PAT | 30.70 | 16.30 | 88 | 69.90 | 50.20 | 39 |
| EPS* (Rs) | 51.8 | 27.5 | | 29.5 | 21.2 | |
| * Annualised on current equity of Rs 23.73 crore; | ||||||
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