Blue Dart Express – Improved Economic Scenario Helps Post Healthy Performance

Blue Dart Express Ltd (Blue Dart) posted a healthy growth in the Dec 2012 quarter as compared to its Sep 2012 quarter results. The logistics and distribution company showed 10% growth in its net income from operations to Rs 459.38 crore.

This improvement was seen on account of improved business activity in India during the Dec 2012 quarter. Even other income increased by 5.39% to Rs 8.41 crore on a sequential basis.

On the bottomline front, net profit jumped by 40% to Rs 45.01 crore against Q2FY13. The company projected this growth as they have managed to pull down its expenses. It has controlled its freight handling and servicing expense and showed 2.9% growth in freight expense. Its other expenses have increased by 33.7%, which has lead to increase the total expenses for the company.

The company's operating profit boosted by 51% to Rs 56.8 crore as compared to the Sep quarter’s Rs 37.5 crore. This was a result of controlled employee and freight and servicing expenses, as also due to a decline in depreciation cost by 8.3% in the Dec quarter.

All these features have helped the company in reporting a strong financial report in this December. Apart from this, the company has changed its accounting year to commence from April 1 of every year and end on March 31 of the following year, to proactively comply with the proposed Companies Bill 2012. Consequent to this, the current accounting period would be for the 15-month period from January 1, 2012 to March 31, 2013.

The company has a global presence in over 220 countries with a strong network distribution. Besides the lower GDP growth, Blue Dart has reported a healthy growth on a consistent basis. Being a debt free company, we expect Blue Dart to report a healthy growth in the coming period and thus be a value creator for the investors. 

On the valuation front, the scrip is trading at 32.90x of its trailing four quarter earnings. We recommend a hold rating to the counter.