Result Update

October 14, 2016

Rating matrix

BlueDart Express (BLUDAR)

Rating
Target

:
:

Buy
| 6000

Target Period
Potential Upside

:
:

12 months
13%

E-com momentum fading; B2B remains crucial

Whats changed?
Changed from | 6500 to | 6000

Target

Changed from | 79.8 to | 75.3

EPS FY17E
EPS FY18E
Rating

Changed from | 100.2 to | 86

Unchanged

Quarterly performance
Revenue

Q2FY17

Q2FY16

YoY (%)

Q1FY17

QoQ (%)

663.2

653.1

1.6

621.4

6.7

EBITDA
EBITDA Margin

74.8
11.3

92.3
-19.0
14.1 -286 bps

77.1
-2.9
12.4 -113 bps

PAT

42.8

54.0

44.1

-20.7

-2.9

Key financials
| Crore

FY15

FY16

FY17E

FY18E

Net Sales
EBITDA
Net Profit

2,272
224
127.2

2,565
382
193.0

2,625
316
178.8

3,019
369
204.4

54.4

81.2

75.3

86.0

FY15

FY16

FY17E

FY18E

112.1
112.1
64.3
46.4
41.4
27.6

65.4
73.9
33.3
30.5
46.6
35.9

70.5
79.7
40.3
25.7
36.4
33.2

61.7
69.8
35.0
21.9
35.4
34.2

EPS

Valuation summary
P/E (x)
Target P/E (x)
EV/EBITDA (x)
P / BV (x)
RONW (%)
ROCE (%)

Stock data
Particular
Market Capitalization (| crore)
Total Debt (FY16) (| Crore)
Cash (FY16) (| Crore)
EV (| Crore)
52 week H/L
Equity Capital (| Crore)
Face Value (|)

| 5310

Amount
12,617
392.2
288.2
12,720.6
7900 / 4911
23.8
10.0

Peer Set
1M

3M

6M

12M

Patel Integrated

(9.1)

(23.4)

(16.8)

(4.4)

Transport Corp.
Blue Dart Exp.

(2.8)

(1.6)

20.9

14.5

(2.7)

(12.0)

(16.3)

(28.5)

Gati

(6.9)

(20.9)

9.8

(19.6)

Research Analyst
Bharat Chhoda
bharat.chhoda@icicisecurities.com
Ankit Panchmatia
ankit.panchmatia@icicisecurities.com

ICICI Securities Ltd | Retail Equity Research

BlueDarts (BDE) results were lower than our expectation across all
parameters. Revenue growth remained sluggish for a second
consecutive quarter with growth of 1.6% YoY (up 6.7% QoQ) to | 663
crore (I-direct estimate: | 666 crore). Contribution from B2C
sequentially grew 200 bps QoQ (down 400 bps YoY) to 22%. Growth
in B2B business remains sluggish
Addition of new aircraft continues to impact EBITDA margins, which
de-grew 286 bps YoY (down 113 bps QoQ) to 11.3% (I-direct estimate:
12.5%). Subsequently, operating profits de-grew 19% YoY (down 3%
QoQ) to | 74.8 crore (I-direct estimate: | 74.8 crore)
A softer operating performance coupled with higher depreciation due
to addition of aircraft, dented PAT. This was partly offset by lower
taxation during the quarter. PAT de-grew 21% YoY (down 3% QoQ) to
| 42.8 crore (I-direct estimate: | 47.7 crore)
E-tailing setback from regulatory overhang; momentum to taper off
During the year, the Department of Industrial Policy and Promotion (DIPP)
created a level playing field between e-commerce and brick & mortar
players. The policy limits e-tailing companies, direct or indirect influence
on sale prices and offers. Further, sourcing norms of not permitting more
than 25% of sales from one vendor or their group companies has further
restricted e-commerce player from offering huge discounts.
Subsequently, the revenue contribution from B2C business declined from
26% in Q2FY16 to 22% in Q2FY17. Further, to enhance the offerings and
maintain the current discounting strategy, these e-commerce companies
would scout for fresh funding, enabling only serious players to survive.
We continue to believe these issues would be gradually phased out and
e-com companies would continue to co-exist with brick & mortar players.
B2B business to recover; too early to term it revival
The B2B segment continues to lag behind with growth of sub-5% during
the current quarter. The management has earmarked growth in the B2B
segment to the uptick in the index of industrial production (IIP), which
tracks the status of production in the industrial sector for a given period of
time compared to a reference period of time. IIP for August contracted for
a second consecutive month by 0.7% compared to de-growth of 2.5% in
July. Given the normal monsoon coupled with a revival in the global
economy, we expect manufacturing activities to ramp up in the second
half of the year and further gather steam in FY18. BDE is the market
leader with 46% market share in the organised air express market.
Further, with a fleet of over 9185 vehicles and 515 facilities, BDE serves
~34000 locations, which is the highest in the industry. No single
sector/client/product forms more than 3-4% of BDEs revenues. With
coverage across industries, we believe BDE revenues are safeguarded
from the perils of client concentration.
Margin traction along with growth; GST to enhance valuation
Subsequent to the muted growth of 1% in H1FY17, we taper our earlier
growth estimates over FY16-18E. With the economy set to gather steam,
BDE coupled with a strong balance sheet and close to debt-free capital
structure is well equipped to ride out the next growth cycle triggered by
GST implementation. Also, as the economy improves, given its strong
client base, BDEs business model provides earnings visibility. We believe
growth will accrue gradually over a time frame and, hence, continue to
value BDE on a DCF model to arrive at a target price of | 6000 with a BUY
recommendation.

Variance analysis
Q2FY17 Q2FY17E
663.2
666.1

Revenue

Q2FY16
653.1

YoY (%)
1.6

Q1FY17 QoQ (%)

621.4
6.7

Freight Handling & Service cost

418.2

409.6

399.9

4.6

381.0

9.8

Employee Expenses

101.2

106.6

95.9

5.6

99.3

1.9

Administrative & Oth Expenses

69.0

66.6

65.0

6.2

64.0

7.9

588.4

582.8

560.7

4.9

544.3

8.1

EBITDA

74.8

83.3

92.3

-19.0

77.1

-2.9

EBITDA Margin (%)

11.3

12.5

14.1 -286 bps

Depreciation

10.9

11.1

Total Expense

9.9

10.3

Margins remained subdued at 12% levels

10.9

0.2

Higher depreciation due to addition of an aircraft

Interest is on account of bonus debentures

7.9

7.7

7.9

0.1

7.7

1.7

Other Income

7.0

8.4

6.9

1.6

8.3

-15.9

PBT

Addition of an aircraft resulted in higher fixed costs

12.4 -113 bps

Interest
Exceptional Gain/Loss

Comments
B2C declined to ~22% of total revenues. However, B2B revenues continue to
remain subdued

0.0

0.0

0.0

0.0

63.0

72.8

81.5

-22.7

66.8

-5.6

Total Tax

20.2

25.1

27.5

-26.5

22.7

-10.8

PAT

42.8

47.7

54.0

-20.7

44.1

-2.9

Source: Company, ICICIdirect.com Research

Change in estimates
FY17E
(| Crore)
Revenue
EBITDA
EBITDA Margin (%)
PAT
EPS (|)

Old
2,887.9

FY18E

New % Change
2,625.4
-9.1

Old
3,354.4

New % Change Comments

3,019.1
-10.0 Revenue estimates tapered on account of decelerating e-commerce revenues

365.9

316.1

-13.6

431.2

369.2

12.7

12.0

-63 bps

12.9

12.2

-14.4

187.9

178.8

-4.8

219.1

204.4

-6.7

79.1

75.3

-4.8

92.2

86.0

-6.7

-63 bps Margins in the near term to get adversely impact due to lower utilisation levels

Source: Company, ICICIdirect.com Research

Assumptions
Current
Revenue Growth (%)
Present Value FCFE
Cost of Equity

Earlier

Phase 1
8.5

Phase 2
26.0

Phase 3
14.5

Phase 1
15.0

Phase 2
28.0

298.7

1,373.6

3,187.3

429.4

1,839.7

11.3

12.1

12.0

11.3

12.1

Phase 3
14.5 Slower-than-expected trade recovery and lower-than-expected growth from etailing to impact near term growth forecasts
4,123.3
12.0 FCFE value Phase 1 (FY15-18), Phase 2 (FY19-25) & Phase 3 (FY26-30)

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 2

Company Analysis
Plethora of products to address myriad customer requirements
The USP for the express industry is its ability to provide door-to-door time
bound services both in terms of documents and non-documents. BDE,
with its suite of integrated solutions provides services right from domestic
door-to-door to international door-to-door through its parents DHL
worldwide network. As an integrated player, BDEs 24 core offerings
distributed across express services, value added services and air freight
services cover a gamut of industry requirements. Its bouquet of offerings
across ground and air express makes BDE a preferential partner for
institutions that require all services under one roof.
Exhibit 1: Core service offerings

Source: Company, ICICIdirect.com Research

Unparalleled network and robust infrastructure catering across India

BDE has the distinction of one of the most extensive domestic coverage
networks with over 34000+ service locations. The company has a
dedicated aviation system with six freighters having a daily haulage
capacity of 504 tonnes together with seven air network stations across
metro cities. In the ground segment, BDE applies a combination of hub
and spoke and centipede model. The ground express segment has a
robust fleet size of ~9200 vehicles with 274 touch points servicing 166
network routes and 20 ground hubs. An extensive reach coupled with
optimised flight scheduling ensures a superior transit time thereby
improving customer value proposition. Among its peers, BDE has double
the coverage compared to its nearest competitor (FedEx). FedEx
coverage has increased due to acquisition of other Indian logistics
companies AFL Pvt Ltd and Unifreight India Pvt Ltd, which will help it
strengthen its domestic services. Such extensive coverage coupled with
time-bound delivery makes BDE an attractive proposition and partner for
business transactions.

ICICI Securities Ltd | Retail Equity Research

Page 3

Exhibit 2: BlueDart leads the way.

Domestic locations

BlueDart

Fedex India*

DTDC

First Flight

34000+

19000

11000+

6700+

International location
Work force

220

220

220

220

10000+

7500

5500

15000

Source: Company, ICICIdirect.com Research, * Post acquisition of AFL and Unifreight India

Consistently proven profitable business model

The company continues to command market leadership in the organised
air express market with ~46% market share. With the addition of a freight
aircraft in FY16, BlueDart now operates a fleet of six Boeing 757-200
freighters and manages daily dedicated services of ~504 tonnes. This
dedicated aviation and ground infrastructure enables BDE to provide its
customers end-to-end express services from a document to a charter
load. The management candidly indicated that the key to its success in
the air freight business is its routing plan, which has remained unchanged
since 1996. BDE intends to remain a market leader in the air express
market. However, it aims to increase its market share (currently at 13%) in
the organised surface express market. With a growth multiple of ~1.5x of
the GDP and ~2x of GDP attached to air express and ground express, we
believe BDE is well positioned to capture the incremental growth.
Exhibit 3: Tonnage growth momentum to continue

Source: Company, ICICIdirect.com, Research

ICICI Securities Ltd | Retail Equity Research

Page 4

Implementation of GST to boost volumes for organised players

The Indian logistics industry is plagued by multiple levels of state and
central taxes. Products are prone to double taxation as taxes already paid
on inputs are not adjusted on calculation of taxes on the final product.
Further complications are in the form of interstate transactions that are
taxed separately for which no input tax credit is available. Thus,
introduction of GST remains a much awaited reform that will simplify
these complications and benefit consumers, produces and the
government. More than 140 markets have implemented GST in some
form or the other. With numerous benefits at both firm/consumer and
economy level, GST is expected to add over 1% to the GDP.
Implementation of GST will lead to a simplified tax structure with a
majority of taxes pooled under one uniform rate, thereby bringing more
efficient tax administration and reduction tax seepages.
Due to multiple taxation, firms had resorted to setting up multiple
warehouses in different states. This was adding to firms costs, as they
were unable to take advantage of economies of scale from using larger
but fewer warehouses. Implementation of GST will overhaul and
compress the entire transportation setup. Under the GST system, it is
estimated that tax will be levied on stock transfers and full credit will be
given on inter-state transactions. The outcome of the same will enable
manufacturers to plan the warehousing and decide on the basis of
operational and logistics efficiency. The current supply chain
arrangements would be realigned keeping in mind certain proximity to
manufacturing locale or consumption markets, resulting in diverse huband-spoke models.
Exhibit 4: Impact on warehousing

Source: ICICIdirect.com Research

Post GST, the demand for warehousing is expected to grow at an annual

rate of 9% from the current 918 mn sq ft to 1440 mn sq ft. The economies
needed would trigger the transition of the logistics sector from the
unorganised to the organised market. With a single rate being applied
across India, the whole country will act as a single market, thereby
reducing taxes in manufactured goods and impacting the pricing of the
product. In the absence of a cascading taxation system, manufacturers do
not have to maintain multiple warehouses to save inter-state tax.
Economies of large scale and centralised management of volumes will
bring in higher efficiencies for logistics companies.

ICICI Securities Ltd | Retail Equity Research

Page 5

Revival to take some time; growth to remain subdued over FY17

For FY16, tonnage handled for BDE grew 7% YoY to 595623 tonnes while
shipments grew 14% YoY to 160 million. Tonnage growth in FY10-16
grew at 14% CAGR whereas total shipments (including domestics and
international) grew at 13% CAGR in the same period. Volume growth in
the air express industry is largely driven by a robust outlook in industries
like banking financial services & insurance (BFSI), e-commerce,
pharmaceuticals and automotive. We believe this volume growth would
be supported by the addition of a freight plane to BDEs fleet in FY16.
BDEs presence in the fastest growing segment of the logistics sector and
its dominant position in the air express with continuously expanding
presence in the ground express segment would enable it to garner higher
tonnage.
Exhibit 5: Tonnage growth momentum to continue
800
595

600

513

596

559

655

721

423
400
200
0
CY11

FY13 (15
mths)

FY14

FY15

FY16

FY17E

FY18E

Tonnage handled (000 tonnes)

Source: Company, ICICIdirect.com, Research

Exhibit 6: Revenue growth to moderate post robust FY16

3,500.0

3,019.1

3,000.0
2,500.0
2,000.0
1,500.0

2,171.7

2,564.5

2,625.4

FY 16

FY 17E

2,272.2
1,938.3

1,492.7

1,000.0
500.0
0.0
CY11

FY13E (15
mths)

FY14

FY 15

FY 18E

Revenues (| crore)

Source: Company, ICICIdirect.com, Research

The cargo of the air express segment is mostly characterised by high

value low weight cargo such as gems & jewellery and high-end consumer
goods. In the ground express segment, BDEs market share improved
from 5.9% in FY07 to 13% in FY15. The segment is driven by strong
outlook in sectors like auto parts, electrical appliances and healthcare
services coupled with growth in the e-tailing segment. As a result, BDE
has been able to maintain strong volume growth as it has ~96%
institutionalised client base providing considerable volume assurance.
Going ahead, we believe that with outsourcing of logistic operations by
online retail and other sector clients, express and logistics players will
benefit notably.

ICICI Securities Ltd | Retail Equity Research

Page 6

Margins to take a toll due to addition of an aircraft; utilisation remains key

BDE is the leader in the air cargo transport with 46% market share, which
is considered the premium segment. Further, BDEs market share on the
ground improved from 5.9% in FY07 to 15% in FY16. With an
improvement in volumes and tonnages, BDE seeks to optimise operating
levers. Rationalisation of fixed expenses and route optimisation will bring
in higher efficiencies that will gradually lead to margin expansion. The
express market has a large number of unorganised players that are
unable to provide the entire spectrum of services across the supply chain
and tend to lose business to quality players like BDE. With every
additional value-added service, BDE manages to increase the revenue per
package, keeping fixed costs constant. Furthermore, a decline in diesel
prices and lower aviation turbine fuel enhances margins by 500 bps to
15% for FY16. However, going ahead, with a rebound in crude prices
coupled with lower utilisation levels, margins are expected to moderate.
The key catalyst here would be a rebound in the B2B segment, which
would enable BDE to expand its margins.
Exhibit 7: EBITDA margin to recover as economy expected to rebound
3500

2500
2000

1938

2625

2565

2272

16

3019

14.9

3000

14
12.2

12.0

9.0

1500

1000
500
0

12
10

9.9

174

123

FY14

224

382
129

193

FY15
Revenue

179

FY16
EBITDA

FY17E
PAT

369

316

204

2
0

FY18E

EBITDA Margin

Source: Company, ICICIdirect.com Research

BlueDart Express preferred player in logistics segment

Logistics, like retail, is a highly fragmented and unorganised segment in
India and providing end-to-end service to upcoming online players
remains a challenge. BlueDart Express (BDE) with its dedicated air
facilities and ground network is well equipped to cater to the growing
needs of online retail players. In 2010, as the online retail market began to
see green shoots, BDE derived nearly 3% of its revenue from the e-tailing
segment. However, currently, the e-tailing segment contributes nearly
25% of total revenue to BDEs topline registering a CAGR of nearly 80% in
FY10-16. Going ahead, as internet penetration grows, growth in the etailing segment is expected to be much stronger in tier-II and III cities.
Consequently, as BDE expands its network to more pin codes from the
current 34267; it will be well geared to cater to a large geographical
scope, thereby increasing revenue share from the online retail segment.

ICICI Securities Ltd | Retail Equity Research

Page 7

Valuation
As the economy nears a turnaround, BDE is expected to be one of the
foremost beneficiaries in the logistics sector. Its strong institutional
clientele and diverse customer proposition such as time definite cargo
delivery, temperature controlled cargo movement, etc, virtually ensure
consistent cargo volume growth in future. Further, with the growth of the
online retail industry, the e-tailing segment is expected to show strong
growth. E-tailing revenue for BDE increased at a CAGR of ~80% in FY1016. As the online segment becomes more vibrant, the revenue
contribution from the segment will only be more pronounced. Also, its
robust balance sheet with strong cash flow and debt-free capital structure
provide a cushion at difficult times. Going ahead, as we expect the
economy to gather steam, passing of fuel hikes to customers becomes
smoother leading to an improvement in margin. Also, as the central
government emphasises on implementation of GST, it is expected to
bring a structural change in the sector, as a whole. We believe, as a
leading player, BDE is well poised to ride the next growth wave.
Following the delay in GST implementation coupled with slower-thanexpected revival in trade activities we had moderated our phase 1 (FY16 18) revenue expectations in our three phases of DCF valuation
methodology. With lower-than-expected H1FY17, we taper our phase one
growth to 8.5% CAGR (vs. earlier 15%). Further, as GST gets
implemented (assuming in FY18) it would take a minimum of two years
for the benefits to percolate to the logistics industry together with
enhanced revenue contribution from the e-tailing segment. Consequently,
our phase two (FY19-25) revenues are expected to grow at a CAGR of
26%. Subsequently, in the third and the last phase (FY26-30), we
anticipate a stable growth period with both revenue and net profit posting
14.5% growth. Subsequently, with an average cost of equity of ~12%
over the three phases (Phase-1=11.3%, Phase-2=12.2% & Phase-3=12%)
and terminal growth rate of 4.5%, we arrive at a DCF based target price of
| 6000 with a BUY recommendation on the stock.
Exhibit 8: DCF based valuation
Particulars

Amount

Average cost of equity (Ke)

12%

PV of Phase 1

298.7

PV of Phase 2

1373.6

PV of Phase 3

3187.3

Terminal Growth Rate

4.5%

Present Value of terminal cash flow

9,396.9

PV of FCFE

4,859.6

Number of Equity Shares outstanding

2.4

DCF - Target price (|)

6,000

Source: Company, ICICIdirect.com Research

Exhibit 9: Valuations
FY15
FY16
FY17E
FY18E

Sales
(| cr)
2272.2
2564.5
2625.4
3019.1

Sales
Growth (%)
17.2
12.9
2.4
15.0

EPS
(|)
54.4
81.2
75.3
86.0

EPS
Growth (%)
5.5
49.2
-7.3
14.3

PE
(x)
115.8
65.6
70.8
62.0

EV/EBITDA
(x)
65.9
33.4
40.4
35.1

RoNW RoCE
(%)
(%)
42.7 28.0
46.6 35.9
36.4 33.2
35.4 34.2

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 8

Recommendation history vs. Consensus

10,000

120.0

9,000
100.0

8,000
7,000

80.0
(%)

(|)

6,000
5,000

60.0

4,000
40.0

3,000
2,000

20.0

1,000
0

0.0
Nov-14 Dec-14

Jan-15 Mar-15

Apr-15

Series1

Jun-15

Jul-15

Sep-15

Idirect target

Oct-15

Dec-15

Jan-16 Mar-16

Consensus Target Mean

Apr-16

Jun-16

Jul-16

Aug-16

Oct-16

% Consensus with BUY

Source: Bloomberg, Company, ICICIdirect.com Research

Key events
Date
Nov-08

Event
BDE to hike freight charges

Sep-09

BDE plans to open new warehouse at Hyderabad airport by Dec-09

Jul-10

BDE speeds up 4.31% as net profit surged 124% YoY in Q2CY10

Apr-11

BDE net profit surges 52% YoY in Q1CY11; MNCs with more than 75% holding gained on delisting news, Bluedart too gained 20%

Feb-12

BDE loses 3.6% to |1608 as profit slipped 6.7% in Q4 December 2011

Apr-12

BDE falls 4% to | 2015 on weak Q1 March 2012 earnings as profit declined 19.5%

Jan-13

BlueDart Express jumps after robust Q4FY13 result (describe result)

Oct-13

Net profit declines 6.65% in September 2013 quarter

May-15

Posts highest EBITDA margins of 11.9% in past seven quarters

Jun-15

Posts highest EBITDA margins of 13% in past nine quarters

Oct-15

Consecutive third quarter of margin expansion with 14.2% EBITDA margins. Upgrade the target price to | 8500

Apr-16

FY16 sees best year in terms of profitability. Revenues grow 13%, margins expand 500 bps to 15%

Aug-16

Reported subdued Q1FY17 results. Revenue grew by 1%; EBITDA margins stood at 12.5%. B2C contribution at 20%

Oct-16

Q2FY17 results below our estimates. Revenue growth remained subdued at ~2%. Margins decline to 11.3%. Target price revised downwards to | 6000

Source: Company, ICICIdirect.com Research

Top 10 Shareholders
Rank
1
2
3
4
5
6
7
8
9
10

Name
DHL Express Singapore Pte. Ltd.
Bright Star Investments Pvt. Ltd.
IDFC Asset Management Company Private Limited
SBI Funds Management Pvt. Ltd.
Matthews International Capital Management, L.L.C.
Axis Asset Management Company Limited
T. Rowe Price International (UK) Ltd.
The Vanguard Group, Inc.
BlackRock Asset Management North Asia Limited
Dimensional Fund Advisors, L.P.

Shareholding Pattern
Latest Filing Date % O/S Position (m) Change (m)
30-Jun-16 0.75
17.8
0.0
30-Jun-16 0.03
0.8
0.0
30-Jun-16 0.02
0.4
0.0
31-Aug-16 0.02
0.4
0.0
30-Jun-16 0.01
0.3
0.1
31-Aug-16 0.01
0.3
0.0
30-Jun-16 0.01
0.2
0.0
31-Aug-16 0.01
0.2
0.0
30-Jun-16 0.00
0.1
0.0
31-Jul-16 0.00
0.1
0.0

(in %)
Promoter
FII
DII
Others

Sep-15
75.0
7.1
5.8
12.1

Dec-15
75.0
7.9
5.5
11.7

Mar-16
75.0
7.8
5.4
11.8

Jun-16
75.0
7.8
5.4
11.8

Value
-0.97
-0.88
-0.73
-0.26
-0.21

Shares
-0.01
-0.01
-0.01
0.00
0.00

Source: Reuters, ICICIdirect.com Research

Recent Activity
Buys
Investor name
Matthews International Capital Management, L.L.C.
Axis Asset Management Company Limited
The Vanguard Group, Inc.
Edmond de Rothschild Asset Management
ICICI Prudential Asset Management Co. Ltd.

Value
7.51
2.62
1.82
1.28
0.91

Shares
0.09
0.03
0.02
0.01
0.01

Sells
Investor name
Driehaus Capital Management, LLC
L&T Investment Management Limited
Handelsbanken Asset Management
J.P. Morgan Asset Management (Hong Kong) Ltd.
Mirae Asset Global Investments (India) Pvt. Ltd.

Source: Reuters, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 9

Financial summary
Profit and loss statement
(Year-end March)
Total operating Income
Growth (%)
Aircraft CharterCost
Other Aircraft Expenses
Fuel Charges
Other Operating Expenses
Employee Cost
Other Expenses
Total Expenditure
EBITDA
Growth (%)
Depreciation
Interest
Other Income
PBT
Total Tax
PAT
Growth (%)
EPS (|)

| Crore
FY14
1,938.3
11.6
40.0
210.6
375.0
702.2
266.6
169.8
1,764.2
174.1
-19.0
27.3
0.0
49.7
196.5
63.5
122.6
-20.7
51.6

FY15
2,272.2
17.2
40.0
420.3
387.0
670.6
321.6
208.3
2,047.9
224.2
28.8
43.6
11.2
24.6
194.1
66.9
129.3
5.1
54.4

FY16
2,564.5
12.9
37.8
322.0
372.4
641.1
500.9
308.6
2,182.8
381.7
70.2
82.1
35.5
30.2
294.3
101.4
193.0
51.7
81.2

FY17E
2,625.4
2.4
37.8
341.3
381.2
735.1
498.8
315.1
2,309.3
316.1
-17.2
43.0
29.9
27.8
271.0
92.1
178.8
-7.3
75.3

FY18E
3,019.1
15.0
37.8
392.5
438.4
845.3
603.8
332.1
2,649.9
369.2
16.8
58.7
29.9
29.2
309.7
105.3
204.4
14.3
86.0

Cash flow statement

(Year-end March)
Profit after Tax
Add: Depreciation
(Inc)/dec in Current Assets
Inc/(dec) in CL and Provisions
Others
CF from operating activities
(Inc)/dec in Investments
(Inc)/dec in Fixed Assets
Others
CF from investing activities
Issue/(Buy back) of Equity
Inc/(dec) in loan funds
Others
CF from financing activities
Net Cash flow
Opening Cash
Closing Cash

| Crore
FY14
122.6
27.3
-53.4
96.0
-7.7
184.7
-1.6
-23.2
37.3
12.5
0.0
0.0
-332.4
-332.4
-135.2
241.6
106.5

FY15
127.2
43.6
-29.4
53.3
-33.6
161.1
-2.2
20.1
7.3
25.2
4.7
332.2
-463.3
-126.5
59.8
106.5
166.2

FY16
193.0
82.1
-31.3
151.9
0.0
395.6
26.5
-562.5
370.5
-165.5
0.0
0.0
-108.2
-108.2
121.9
166.2
288.2

FY17E
178.8
43.0
-5.5
1.8
0.0
218.1
0.0
-100.0
204.2
104.2
0.0
0.0
-336.8
-336.8
-14.5
288.2
273.7

FY18E
204.4
58.7
-76.9
-25.2
0.0
161.0
0.0
-100.0
-28.6
-128.6
0.0
0.0
-113.5
-113.5
-81.1
273.7
192.6

FY14

FY15

FY16

FY17E

FY18E

51.6
63.1
270.6
49.9
44.8

53.5
71.9
129.3
20.0
70.0

81.2
115.8
174.3
40.6
121.3

75.3
93.4
206.7
37.6
115.2

86.0
110.7
242.9
43.0
81.1

9.0
9.5
6.3
0.5
50.2
20.2

9.9
8.5
5.6
0.6
46.7
20.6

14.9
11.5
7.5
3.0
45.3
24.6

12.0
10.3
6.8
3.0
45.0
24.0

12.2
10.3
6.8
3.0
45.0
21.0

19.1
22.5
28.7

41.4
27.6
40.4

46.6
35.9
57.8

36.4
33.2
45.0

35.4
34.2
35.3

131.8
92.2
8.3
8.3
25.1

112.1
64.3
6.3
6.3
46.4

65.6
33.4
5.0
4.9
30.6

70.8
40.4
4.9
4.8
25.8

62.0
35.1
4.3
4.2
21.9

0.0
0.0
1.6
1.6

1.5
1.1
1.7
1.6

1.0
0.9
1.5
1.4

1.2
0.7
1.4
1.3

1.1
0.6
1.5
1.1

Source: Company, ICICIdirect.com Research

Source: Company, ICICIdirect.com Research

Balance sheet

| Crore

(Year-end March)
Liabilities
Equity Capital
Reserve and Surplus
Total Shareholders funds
Total Debt
Long term Provisions
Other Long term liabilities
Deferred Tax Liability
Minority Interest
Total Liabilities

FY14

FY15

FY16

FY17E

FY18E

23.8
619.2
643.0
0.0
9.4
0.0
17.46
0.00
669.8

23.8
283.5
307.3
332.2
14.8
0.0
10.17
0.00
664.5

23.8
390.4
414.1
392.2
17.6
11.0
-14.65
12.39
832.7

23.8
468.5
492.2
392.2
0.0
0.0
9.47
12.39
906.3

23.8
556.3
580.1
392.2
0.0
0.0
0.00
12.39
984.7

Assets
Gross Block
Less: Acc Depreciation
Impairment
Net Block
Capital WIP
Total Fixed Assets
Non-current Investments
Long term loans & advances
Deferred Tax Asset
Inventory
Debtors
Loans and Advances
Other Current Assets
Cash
Current investments
Total Current Assets
Creditors
Other liab & Provisions
Total Current Liabilities
Net Current Assets
Application of Funds

423.7
195.7
0.0
228.0
8.5
236.5
24.3
235.9
0.5
2.7
266.7
67.1
0.1
106.5
0.0
443.1
107.3
163.1
270.4
172.7
669.9

386.8
171.1
0.0
215.6
25.4
241.0
26.5
183.0
0.6
4.0
291.0
71.0
4.8
166.3
0.0
537.0
128.0
205.3
333.4
203.6
664.5

953.2
448.8
0.0
504.4
21.5
525.9
0.0
86.8
1.2
21.1
318.4
57.8
8.9
288.2
0.0
694.4
173.0
302.6
475.6
218.8
832.7

1,074.7
491.8
0.0
582.9
22.5
605.4
0.0
91.1
1.2
21.6
323.7
57.5
9.3
273.7
0.0
685.8
172.6
304.7
477.3
208.5
906.2

1,174.7
550.5
0.0
624.2
23.7
647.8
0.0
95.7
1.2
24.8
372.2
82.7
9.8
192.6
0.0
682.2
173.7
278.4
452.1
230.0
974.7

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Key ratios
(Year-end March)
Per share data (|)
EPS
Cash EPS
BV
DPS
Cash Per Share
Operating Ratios (%)
EBITDA Margin
PBT / Total Operating income
PAT Margin
Inventory days
Debtor days
Creditor days
Return Ratios (%)
RoE
RoCE
RoIC
Valuation Ratios (x)
P/E
EV / EBITDA
EV / Net Sales
Market Cap / Sales
Price to Book Value
Solvency Ratios
Debt/EBITDA
Debt / Equity
Current Ratio
Quick Ratio

Source: Company, ICICIdirect.com Research

Page 10

ICICIdirect.com coverage universe (Logistics)

Sector / Company
Container Corporation
BlueDart
Gati Ltd.
Gujarat Pipavav (GPPL)

CMP
M Cap
(|)
TP(|) Rating (| Cr)
1,370 1,600
BUY 26,711
5,310 6,000
BUY 12,617
131
200
BUY 1,143
177
190 HOLD 8,556

EPS (|)
FY16 FY17E FY18E
53.7 40.4 46.6
81.2 75.3 86.0
4.2
5.9
7.3
5.4
5.0
6.1

P/E (x)
FY16 FY17E FY18E
33.9 29.4 21.4
65.4 70.5 61.7
31.2 22.3 18.0
32.7 35.5 28.9

EV/EBITDA (x)
FY16 FY17E FY18E
24.0 20.0 14.6
33.3 40.3 35.0
12.2
8.8
7.1
17.8 17.1 13.9

RoCE (%)
FY16 FY17E FY18E
8.8 10.6 13.5
35.9 33.2 34.2
11.4 14.3 16.4
14.9 12.4 13.7

RoE (%)
FY16 FY17E FY18E
9.7 10.3 12.8
46.6 36.4 35.4
6.6
8.8 10.1
13.1 10.3 11.2

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Page 11

RATING RATIONALE

ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns

ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;

Pankaj Pandey

Head Research

pankaj.pandey@icicisecurities.com

ICICIdirect.com Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No. 7, MIDC,
Andheri (East)
Mumbai 400 093
research@icicidirect.com

ICICI Securities Ltd | Retail Equity Research

Page 12

ANALYST CERTIFICATION
We /I, Bharat Chhoda, MBA and Ankit Panchmatia, MBA, Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately
reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this
report.

Terms & conditions and other disclosures:

ICICI Securities Limited (ICICI Securities) is a Sebi registered Research Analyst having registration no. INH000000990. ICICI Securities is full-service, integrated investment banking and is, inter alia, engaged
in the business of stock brokering and distribution of financial products. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is Indias largest private sector bank and has its various subsidiaries
engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (associates), the details in respect of which are available on
www.icicibank.com.
ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking
and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts
and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.
The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and
meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without
prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current.
Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended
temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this
company, or in certain other circumstances.
This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This
report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their
receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific
circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate
the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any
loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the
risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to
change without notice.
ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment
in the past twelve months.
ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in
respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction.
ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned
in the report in the past twelve months.
ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its analysts did not receive any compensation
or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts have any
material conflict of interest at the time of publication of this report.
It is confirmed that Bharat Chhoda, MBA and Ankit Panchmatia, MBA, Research Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding
twelve months.
Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
ICICI Securities or its subsidiaries collectively or Research Analysts do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the
publication of the research report.
Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject
company/companies mentioned in this report.
It is confirmed that Bharat Chhoda, MBA and Ankit Panchmatia, MBA, Research Analysts do not serve as an officer, director or employee of the companies mentioned in the report.
ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.
Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report.
We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities.
This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution,
publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities
described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and
to observe such restriction.

ICICI Securities Ltd | Retail Equity Research

Page 13