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Kotak Securities
Blue Dart Express (Buy)
Target: ₹7,700
CMP: ₹6,484.3
Blue Dart Express is the market leader in Air Express Industry with 48.5 per cent market share and is a fast growing player in Ground Express Industry with 16.5 per cent market share in India. It has the requisite infrastructure, tie-ups, product offerings, technology, skilled manpower and an established brand name which is synonym to reliability and faith.
Blue Dart has been continuously investing in modernising IT systems and integrating new technologies to improve its performance, processes and standards. For instance, the company is continuously focussing on enabling digitalised On-Field data capture of Delivery and pickup of shipments.
Parenthood of DHL (75 per cent holding) brings in best global practices in the company.
We believe the company is well placed to be part of high growth express logistics industry in the country over FY21 to FY24. We estimate Blue Dart to deliver 34 per cent earnings CAGR over FY21 to FY24 amidst receding Covid globally and strong GDP growth in India.
We re-initiate coverage on Blue Dart with a Buy rating and a target price of ₹7,700 at 55x FY24 earnings, a premium for its market leadership, strong infrastructure, healthy growth rate, strong return ratios, strong balance sheet and parentage of DHL.
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