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ICICI Securities is bearish on Blue Dart Express recommended sell rating on the stock with a target price of Rs 1746 in its research report dated September 10, 2020.
ICICI Securities research report on Blue Dart Express
Two recent events have generated significant interest for air express players: 1) Global belly cargo capacity has remarkably reduced and, on some routes, air freight rates have increased by 30-60%. Due diligence suggests that rates have gone up in India by 7-15% -- a hope-inducing factor for Blue Dart Express (BDE) given its operating leverage. 2) Recent DHL commentary highlights the Covid vaccine distribution opportunity that may open up for the air express industry. Reseachers have also estimated that 15,000 flights would be needed to ensure global distribution of the vaccine over next two years. This presents an opportunity for the Indian express and 3PL players.
Outlook
These two events have resulted in salience for Indian air express, particularly BDE. Reiterate SELL on BDE as the structural headwinds of the model will sustain.
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