Hold Blue Dart Express; target of Rs 6525: ICICI Securities

Hold

ICICI Securities research report on Blue Dart Express

Blue Dart Express’ (BDE) Q2FY24 EBITDA surpassed our estimates by 9.2%. Key points: 1) Number of shipments and tonnage rose ~13.6% YoY and 2.5% YoY, respectively; 2) EBITDA margin improved to 16.8% (Q2FY23: 15.4%) and; 3) reduction in operating cost as 2nos new freighters start contributing. Going ahead, we believe our major concerns on both volume growth and margin improvement have been allayed as capacity utilisation of new freighters is likely to go up further. Taking cognisance of margin improvement, we have raised our FY25E EBITDA by 3.8% and EBITDA margin to 17% (earlier 16.4%). We have also raised the valuation multiple to 34x (earlier: 30x) EPS factoring in margin and volume improvement.

Outlook

We upgrade BDE stock to HOLD (earlier Sell) with a revised TP of INR 6,525 (earlier: INR 5,795).

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Blue Dart Express - 30 - 10-2023 - icici