Blue Dart Q3 Results Review - Ebitda Misses Estimates Despite Festive Cheer: ICICI Securities

ICICI Securities Report

Blue Dart Express Ltd.’s Q3 FY24 Ebitda missed our estimates by 10.5% due to lower-than-expected volume growth. Key points:

1. Number of shipments rose ~4.6% and tonnage rose 4.1% YoY;

2. both Ebitda/shipment and Ebitda/tonne declined QoQ and YoY;

3. Ebitda margin deteriorated to 15.4% (Q3 FY23: 17.1% and Q2 FY24: 16.8%) and marked a break in its margin improvement trajectory on lower-than-expected volume uptick, leading to unfavorable cost impact.

We believe margins may remain stable at 16-17% while volume growth can be 8-10% through to FY26E. Taking cognizance of 9M FY24 performance, we have cut our EPS estimates for FY24E/FY25E by 14%/16%.

We roll over to FY26E when we expect the volume from two new freighters to stabilise and be meaningfully margin accretive.

Our revised target price works out to Rs 6,990 (earlier Rs 6,525) on an unchanged 34 times FY26E earnings per share. Maintain 'Hold'.

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