182% return in 9 months: Analysts upgrade this midcap stock post-Q4 results

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Midcap firm Blue Dart Express has been on a roll on and its latest earnings scorecard is yet another indication of the company overcoming core concerns of the past. Shares of the company have jumped 182% to Rs 5,319 on May 5 from Rs 1,887.30 on August 17, 2020.

The logistics services provider on April 5 posted a consolidated profit of Rs 90 crore for the fourth quarter ended March 31. It had posted a net loss of Rs 30.57 crore in the January-March period a year ago. Market analysts hold a bullish view on the company post Q4 results.

Brokerage view

While retaining a ‘Buy’ call on Blue Dart Express, brokerage Edelweiss Securities said, “After being negative on Blue Dart Express (BDE) for over two years (2018-20), we had turned positive in October 2020 as we believed its most fundamental problems (high fixed cost, unfavourable business mix, rising competition) were behind. Two quarters on, this thesis is playing out strongly. Q4FY21 has turned out to be yet another good quarter, turnover-wise as well as on margins, as BDE has regained pricing power, without volume loss.”

It has also revised the target price upward to Rs 6,425 (from Rs 5,060 earlier), indicating an upside of 20% from the current market price.

Antique Stock Broking has also upgraded Blue Dart with a price target of Rs 6,500 (Rs 5,440 earlier).

“BDE registered strong exit to FY21 with another quarter of robust operating performance. After bottoming in Q1, the company has been delivering better than expected results for past three quarters on the back of improved economic activity, traction in e-commerce, higher pricing and several cost rationalisation initiatives-all contributing to superior margins in consecutive quarters,” the brokerage said, adding the impact of partial lockdowns on account of second Covid wave is getting visible in slowing topline in May.

Solid comeback

For the financial year ended March 31, the company posted a profit of Rs 101.81 crore. It had reported a net loss of Rs 41.86 crore in the previous year.

Blue Dart Express is engaged in the business of integrated air and ground transportation and distribution of time-sensitive packages to various destinations, primarily within India. The company provides courier and express services.