Buy Blue Dart Express; target of Rs 9500: Motilal Oswal

Motilal Oswal is bullish on Blue Dart Express recommended buy rating on the stock with a target price of Rs 9500 in its research report dated August 27, 2024

Broker Research

August 28, 2024 / 12:09 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on Blue Dart Express

After slow growth in FY24 and 1QFY25, demand is expected to pick up for the express logistics segment. Long-term growth is expected to be primarily driven by increasing urbanization, rising consumer demand, and changing consumer preferences toward faster delivery. BDE is making strategic investments in infrastructure and network expansion. The surface logistics segment is expected to grow faster than the air express business and BDE is positioning itself for capitalizing on the opportunity. In air express, BDE has added two new aircraft to cater to tier-II and tier-III cities as it sees a healthy demand outlook in these cities for the long term. The two new aircraft have replaced third-party volume with in-house operations. The share of third-party cargo has declined from 20-25% to 10-11% currently. The Guwahati route is still ramping up and the new aircraft are expected to break even in the next few quarters.

Outlook

BDE’s investment in surface express is backed by ~2x higher growth witnessed in surface express volumes in 1QFY25 than air volumes. With an increasing market share of BDE in the surface express segment, along with network expansion, we expect BDE to register a CAGR of ~17%/32%/36% in revenue/EBITDA/PAT over FY24-26. We maintain our BUY with a TP of INR9,500 (based on 24x FY26E EV/EBITDA).

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