Neutral Blue Dart Express; target of Rs 7715: Motilal Oswal

Motilal Oswal's research report on Blue Dart Express

BDE has delivered a robust performance over the last several quarters, despite a steep rise in fuel prices. It has been able to take adequate price increases, which helped maintain its robust margin. The cost control measures are playing out well, with BDE clocking a record high EBITDA margin. Going forward, the unparalleled network of BDE and its strong growth in Express Cargo will drive consistent volume growth. With an improved outlook and capacity utilization currently near its peak, BDE is actively looking to add one aircraft to its fleet. BDE is looking to raise its contribution from the Ground Express segment from current levels of 30-35%.

Outlook

Growth in Ground Express is expected to be 2x that in Air Express due to the cost differential between these services. With decent volume growth and margin, we expect BDE to clock a revenue/EBITDA/PAT CAGR of ~13%/8%/6% over FY22-24. We maintain our Neutral rating, with a TP of INR7,715/share (21x FY24E EV/EBITDA).

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