Buy Blue Dart Express, tgt Rs 872: HEM Securities

HEM Securities has maintained buy rating on Blue Dart Express with target price of Rs 872 in its March 11, 2008 research report. "The company will invest Rs 10 billion in the next five years over a short to medium term in air infrastructure, aircraft, ramping up of ground infrastructure with state-of-the art facilities, transit hubs and for hi-tech material handling equipment. Blue Dart has firmed up plans to open 120 new facilities across the country by this year-end . A capex for over Rs 2 billion has been earmarked for this year in air infrastructure, ground infrastructure, technology and material handling. This will provide huge opportunities for the company to tap the logistics market. Blue Dart Aviation, a subsidiary of express cargo firm Blue Dart is planning to start scheduled overseas operations. The move would enable company in improving utilization of its aircraft, which currently fly for only eight hours at night. The usage of these through the day for an international service would help the company make more efficient use of its assets.The company with strong future plans and large capital expenditure is expected to capitalize its growth"

"The stock at the current market price of Rs 595 will trade 20.19 times to its earnings and 4.41 times to its book value. The stock is expected to provide huge upside potential in the light of strong growth platform on both front sector as well as company. Therefore, we are initiating ‘BUY’ signal on the stock with the target price of Rs 872 which is approximately 45% up from the current market price of Rs 595" says HEM Securities research report.

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