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Neutral Blue Dart Express; target of Rs 8380: Motilal Oswal

Motilal Oswal recommended Neutral rating on Blue Dart Express with a target price of Rs 8380 in its research report dated July 28, 2022.

July 30, 2022 / 10:43 PM IST
 
 
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Motilal Oswal's research report on Blue Dart Express


Blue Dart Express (BDE) reported a healthy revenue growth of 50% YoY to ~INR12.9b in 1QFY23 (est. INR11.6b), driven by higher growth in the Surface and e-commerce segments. Realizations were flat despite the sharp increase in fuel costs due to a change in product mix towards heavier parcels and increase in share of surface express. The e-commerce segment continued to do well and management expects the momentum to sustain.  EBITDA margin stood at 14.7% in 1QFY23 (est. 16.0%), 510bp higher YoY but 394bp lower QoQ. Sharp increase in Air Turbine Fuel (ATF) prices coupled with increase in employee costs hurt margins QoQ. BDE is expecting demand to be strong going forward and is looking to add two aircraft in its fleet by end-FY23E, which should increase its capacity by ~20%. Management expects margins to sustain at current levels.



Outlook


We raise our FY24 EPS estimate marginally by 4%, factoring in stronger volume growth. We maintain our Neutral rating on the stock with a revised TP of INR8,380 (premised on 20x FY24E EV/EBITDA).

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Blue Dart Express - 290722 - moti

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first published: Jul 30, 2022 10:43 pm
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