Blue Dart Q4 Results Review - Subdued Volumes, High ATF Prices Hurt Margins: Motilal Oswal

Motilal Oswal Report

Blue Dart Express Ltd. reported 4% YoY revenue growth to ~Rs 12.2 billion in Q4 FY23 (our estimate: Rs 13.1 billion). Blue Dart handled 0.27 million tonnes of cargo volume (up 9.5% YoY), while realisation dropped ~5% YoY to Rs 44.5/kg during the quarter.

Ebitda margin came in at 10.5% versus our estimate of 11.8%. Ebitda declined 41% YoY to Rs 1.3 billion. Adjusted profit after tax declined 48% YoY to Rs 703 million in Q4 FY23 (20% below estimate) led by weak operating performance.

During FY23, Blue Dart carried 328 million shipments weighing 1.15 million tonnes. The company reported revenue of Rs 51.7 billion (up 17.3% YoY), Ebitda margin of 12.2% (down 370 bp YoY) and adjusted profit after tax of Rs 3.7 billion (down 11% YoY) in FY23.

Blue Dart’s performance has been hit by subdued volumes and high aviation turbine fuel prices. While it has undertaken general price hike, the impact of the same would be visible from Q1 FY24. Further, Blue Dart is negotiating with airlines to provide discounts to compensate for the gap in pricing between Brent and global crude prices.

We believe margin improvement could be gradual due to subdued volumes, current inflationary environment and start-up costs related to new aircraft additions.

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