Company Update: Blue Dart Express (BDE) - BUY - TP Rs.5150 - Kotak

Weak business environment (esp. B2B segment), consultancy charges of Rs 350 mn paid to Mckinsey to develop a future strategy for BDE and increasing competition were the factors responsible for weak performance of BDE in FY17. However, improved outlook, a fresh strategy under the observation of Mckinsey, implementation of GST, and benign fuel cost are expected to keep the growth momentum healthy with improvement in margins and return ratios going forward. For BDE, we expect 9% volume CAGR, 10%revenue CAGR and 22% earnings CAGR over FY17 to FY19E with ROE of 27% and ROCE of ~30% in FY19. BDE continue to remain as one of the key stocks to invest in the courier space which is expected to benefit from formalization of the sector and the boom of the ecommerce segment. Recommend BUY (from SELL) with an increased TP of Rs 5150 (from Rs 4420)

Shares of BLUE DART EXPRESS LTD. was last trading in BSE at Rs.4713.15 as compared to the previous close of Rs. 4399.75. The total number of shares traded during the day was 4872 in over 1361 trades.

The stock hit an intraday high of Rs. 4774 and intraday low of 4399.75. The net turnover during the day was Rs. 22668633.

Source : Equity Bulls

Keywords