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ICICI Securities
Blue Dart Express (Sell)
CMP: ₹2,275
Target: ₹1,838
Blue Dart Express Ltd is engaged in the business of integrated air and ground transportation and distribution of time-sensitive packages to various destinations, primarily within India. The company provides courier and express services. The company’s technology-based business offerings include InternetDart, ShopTrack, PackTrack, MobileDart, ShipDart and ImageDart.
Indian B2B express business seems to be at the centrestage of business news — be it unconfirmed reports around acquisition of majority stake in Gati by Allcargo, or Delhivery’s interest in the express business of Blue Dart (and Gati). In our discussions with corporates as well as investors, the theme that repeatedly emerges revolves around futility of enhancing the express portfolio through inorganic acquisitions. To keep growth going, new business acquisitions are a must, hence B2B express may appear prospective for players like Delhivery.
While funding (for such acquisitions) may not yet be a problem, the strategy needs to be rechecked. However, for Blue Dart (majority and minority) shareholders, any inorganic move, if it materialises, would be welcome. Nevertheless, based purely on current business prospects, we maintain ‘sell’.
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