Re-iterate Buy on Bluedart Express Ltd - Destimoney Research

We are re-iterating BUY rating on Bluedart Express Limited (Bluedart) with a revised target price of Rs.2,391 per share.

While Bluedart's topline growth is healthy, operating performance has been impacted by one time wet lease arrangement for an aircraft as the regular aircraft went for maintenance.

Prevalent high crude prices have also impacted the profitability. The company has adopted a new mechanism to quickly respond to the volatility in ATF prices.

High volatility in forex has impacted profitability in past few quarters. Bluedart has ~$1.3 mn exposure to forex on account of leased fleet of aircrafts.

Bluedart's revenue grew by 22% in Q1CY12, underpinned by the growth in e-commerce in the country. The company continues to enjoy top of the mind recall in the express delivery space. With enough room to grow for each player, intensified competition as reflected by ad spend by players like FedEx is not felt on Bluedart's growth.

The company continues to gain ground on its peers at its market share in domestic air express industry grew to 45.9% in CY11 from 40% in CY10. In the ground segment the company garnered a market share of 12.4% in CY11 from 8.5% in CY10.

We expect the company's revenue to grow at 19% between CY11-CY16, well above the expected 17% industry growth rate attributed to its pricing power for the unparallel quality of service (QoS).

Source : Equity Bulls

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