Hold BlueDart Express; target of Rs 2500: ICICI Direct

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

live

• bselive
• nselive

Volume

Todays L/H

More

×

ICICI Direct's research report on BlueDart Express

Blue Dart’s’ management continued to describe the business environment as volatile and challenging. The company continues to invest in building long term capabilities. This has negatively impacted profitability in the short-term. Revenues grew 7% YoY, buoyed by stable growth in the B2B segment, compared to the B2C segment, which remained challenging. Reported EBITDA margins contracted 41 bps YoY to 5.7% (I-direct estimate: 5.5%) with absolute EBITDA remaining flat YoY to Rs 45 crore (I-direct estimate: Rs 44 crore). However, adjusting for the Ind-AS 116 leases effect, EBITDA margins were at 4.4% (decline of ~170 bps YoY). Subsequently, reported PAT de-grew 80% to Rs 5 crore (I-direct estimate of Rs 22 crore) mainly due to adjustments related to Ind-AS 116 leases accounting (higher depreciation and interest rates). Adjusted PAT (Rs 20 crore), on the other hand, came broadly in line with the I-direct estimates, in spite of the below expected operational performance, aided by lower tax rate (10% vs. estimated 35%).

Outlook

However, due to higher competition in the B2C segment and continued capex, we maintain our HOLD recommendation, valuing the stock at 40x FY21 earnings with a target price of Rs 2500.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More