One such name is logistics services provider
. The stock has trebled price in the past three quarters, and scaled a new 52-week high of Rs 5,847 on March 31, 2021, rising from Rs 1,860 in July 2020. It hovered around Rs 5,355 level on Thursday.
The first wave of the Covid-19 pandemic caused disruption to a number of industries, but the logistics and delivery business flourished. Among them, Blue Dart weathered all the challenges and continued to ensure service delivery to customers. The opening up of the economy worked well for the company.
And in the second wave, the company emerged among the biggest beneficiaries of the vaccination drive, as pharma companies and the government tried to roll out Covid vaccines on a war footing to try and control the rapid spread of the pandemic.
Blue Dart is making the most out of this operation, as it emerged the topmost choice to provide logistics support for the largest vaccination drive in the globe.
Ace investors and Dalal Street veteran Radhakishan Damani held as much as 465,770 equity shares, or 2 per cent stake, in the company at the end of March quarter.
He booked profit on the counter all through last year, bringing his holding down from 3.1 per cent at the end of June quarter to 2.3 per cent at the end of September quarter and 2 per cent at the end of the December quarter. At current market price, Damani’s stake is worth Rs 260 crore.
In terms of business fundamentals, the logistics firm reported a consolidated profit of Rs 90 crore for the fourth quarter ended March 2021 against Rs 30.57 crore posted for the year-ago period.
Total income rose 34.11 per cent to Rs 975.64 crore from Rs 727.49 crore in the year-ago quarter. Total expenses rose 12.49 per cent from Rs 758.87 crore in Q4 of FY20 to Rs 853.63 crore at the end of Q4 of FY21. The company has declared a dividend of Rs 15 per share.
Brokerage firm Edelweiss said the company’s Ebitda margin expanded 120 basis points QoQ. “Things have continued to move in the right direction, including a leaner cost structure, which have aided margins. An aggressive ramp-up of the road express business earlier and weakening of a few PE-backed players helped,” it said.
ICICI Securities said the company consolidated the gains achieved in Q3FY21 (driven by limited belly cargo capacity) and enjoyed better mix with more B2C air express cargo. “The same resulted in 33 per cent YoY revenue growth in Q4FY21 and nearly helped maintain margin performance of Q3FY21,” it said.
However, the brokerage maintained a ‘sell’ rating on the stock with a price target of Rs 5,320. “The resilience of B2B air express (IT, pharma, medical equipment) revenue also helped. Normalisation of pent-up consumer spending (e-commerce) and impending competition from increased belly cargo of domestic freighters, rail as well as road sectors makes us less confident on the volume front,” it said.
Some other brokerages also have mixed views on the stock.
Despite less-than-expected top line growth in March quarter, brokerage YES Securities had an ‘add’ rating on the stock, as it thought Ebitda and PAT turned out to be as per expectations. The brokerage said it would review the estimates post management commentaries .
Edelweiss has retained a ‘buy’ rating on the stock with a revised price target of Rs 6,425 (Rs 5,060 earlier) as it felt “the consensus is behind the turnaround in this business.”
Likhita Chepa, Senior Research Analyst at CapitalVia Global Research, said Blue Dart will benefit from the ability to distribute Covid vaccines across the cold storage supply chain. “The company’s latest temperature-controlled logistics (TCL) technologies has the potential to boost the company’s bottom line,” she said and offered a bullish view on the stock for the medium term.
Antique Stock Broking said the company registered a strong exit to FY21 with another quarter of robust operating performance. “After bottoming out in Q1, the company has delivered better-than-expected numbers for the past three quarters,” he said.
“Going forward, the impact of partial lockdowns on account of the second wave of Covid-19 got visible in the slowing topline in May. For the risks associated with Covid second wave, the upgrade would have been even higher,” the brokerage added and assigned a buy rating to the stock.
Antique has revised its price target to Rs 6,500 from Rs 5,440, valuing the stock at 45 times FY23 EPS.
