Blue Dart Express has benefitted from buoyant demand conditions in the country and signs of a revival in the global economy

Blue Dart Express, a leading player in South Asia for courier and integrated express package distribution, benefited from strong demand conditions in the quarter ended March 2011, thanks to buoyant demand conditions in India and signs of a revival in the global economy. The company''s net sales in the first quarter of the calender year 2011 grew 30.8% y-o-y, which was even faster than the growth reported in CY10, when net sales grew nearly 26.8%. Blue Dart Express, in which DHL Express Singapore controls over 81% of the capital, follows a calendar year for its results.

ET Investors Guide had recommended this stock in our issue dated November 8, 2010 and since then the stock has gained 35% compared to an 8.5% fall in the Sensex.

Blue Dart has also shown strong growth vis-à-vis its larger players. For instance, during the trailing four-quarters ended March 2011 quarter, Blue Dart Express net sales grew 28.5% y-o-y, while net profit grew 46.5%. And this was considerably faster than the mediocre growth reported by the largest domestic logistics player, Container Corporation of India (CCI), during this period.

Logistics Network
Blue Dart Express follows an integrated business model and the company''s fleet of four Boeing 757s and three B737 freighter aircraft are operated by Blue Dart Aviation, an associate company. In addition, its network includes over 5,351 vehicles, 56 domestic warehouses and over 14.8 lakh square feet of facility space at the end of December 2010.

The company reaches over 25, 646 locations across the country and more than 220 countries and territories worldwide, being a member of the DHL group. It had financed its expanded network from internal accruals. Blue Dart had invested Rs 117 crore between December 2008 and December 2010, while its operational cash flow was Rs 131.6 crore. Blue Dart Express is debt-free company.

Financials
The company''s operating profit margin was broadly flat at 15.8% on a y-o-y basis in the first quarter of CY11, while its net sales grew 30.8% to Rs 337 crore. Its brand is well recognised and analysts highlight the superior realisations per unit of good transported vis-à-vis its peers, which helped the company offset higher input costs like freight, handling and service costs. Blue Dart''s net profit also rose 51.7% y-o-y in the March 2011 quarter.

Valuations
Blue Dart Express at Rs 1,438 trades at a P/E of 32.5 times on a trailing four-quarter basis. Larger rivals CCI trades at a P/E of 20.8 times, while Allcargo on a consolidated basis trades at a P/E of 13.2 times.