Broker Call: Blue Dart Express (Buy)
Blue Dart Express is the market leader in Air Express industry with 48.5% market share and is a fast growing player in Ground Express industry with 16.5% market share in India. It has the infrastructure, links, product offerings, technology, a skilled workforce and an established brand that are synonymous with reliability and trust.
Blue Dart continuously invests in the modernization of IT systems and the integration of new technologies to improve its performance, processes and standards. For example, the company continually strives to enable the capture of digital data in the field of delivery and pick-up of shipments.
DHL parenthood (75 percent ownership) brings global best practices to the business.
We believe the company is well positioned to be a part of the high growth express logistics industry in the country in fiscal years 21-24. We estimate that Blue Dart will generate a 34% CAGR in earnings in fiscal years 21 through. 24 against a backdrop of declining Covid worldwide and strong GDP growth in India.
We are resetting the hedge on Blue Dart with a buy rating and price target of 7,700 to 55 times FY24 earnings, a bonus for its market leadership, strong infrastructure, healthy growth rate , solid performance ratios, a solid balance sheet and the DHL lineage.