SELL (Target Rs1,420, Downside 31.1%)
Bluedart reported 47.2% yoy decline in revenues during Q1 FY21 largely impacted by COVID-19 related lockdown. The revenue decline was due to a similar decline in volumes while realization remained largely stagnant. During the quarter, volumes were driven by higher share of packages while document shipments were lower. As several offices were shut during lockdown shipment of documents was severely impacted. The Company provided 20-25% discount on shipments related to medical equipment's. The Company levied Emergency Situations Surcharge on certain shipments to offset the low capacity utilization which supported realizations to some extent. However, the sharp drop in volumes saw Company report loss at operating level.
We expect utilization to reach Pre-COVID levels by start of H2 FY21. We, however, continue to believe that Air express would grow at much slower pace than surface cargo. Also, Bluedart's market share in Surface express is likely to increase gradually with higher competition in the industry. This would continue to impact the overall growth in near to medium term. We maintain our estimates for FY22 and retain our SELL rating on the stock with a 12m TP of Rs.1,420 (7.5x FY22 EV/EBITDA multiple).
Shares of BLUE DART EXPRESS LTD. was last trading in BSE at Rs.1978.1 as compared to the previous close of Rs. 2061.85. The total number of shares traded during the day was 1726 in over 479 trades.
The stock hit an intraday high of Rs. 2055.05 and intraday low of 1955.55. The net turnover during the day was Rs. 3422083.