In This Article:
Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Blue Dart Express Ltd (BOM:526612) reported a profit after tax of INR 608 million for the quarter ended September 2024.
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The company achieved a revenue from operations of INR 14,485 million for the same period.
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Utilization of new aircraft has improved, with a reduction in unutilized expenses from 11 crores to 8 crores.
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The company expects better performance in the festive quarter, indicating potential revenue growth.
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Surface business has been a growth engine, with the segment growing at around 14%.
Negative Points
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Consolidated margins have not improved despite an 11% growth in volumes, remaining around 15% compared to 17% last year.
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The shift towards surface transport, which is margin dilutive, is impacting overall margins.
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There is competitive pressure in the e-commerce segment, affecting pricing and margins.
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The company faces challenges in achieving the ideal utilization rate of 90-92% for new aircraft.
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There is uncertainty regarding the ability to fully implement planned price hikes due to potential customer resistance.
Q & A Highlights
Q: Can you provide the tonnage and number of parcels carried this quarter? A: The shipments for this quarter were 96.6 million, and the weight was 33 lakh, 43,676 million.
Q: What is the current utilization level of the new jets, and have they broken even? A: Utilization on the new aircraft has improved from the previous quarter, with fixed expenses decreasing from 11 crores to around 8 crores. The aircraft have broken even, and utilization is approximately 82-83%, with a target of 90-92%.
Q: What is the growth outlook for tonnage this year, especially during the festive season? A: While we generally do not provide forward-looking statements, the outlook is positive due to the festive season. We expect this quarter to be better than the previous one.
Q: Why are the console margins not improving despite volume growth? A: The product mix is shifting more towards ground services, which is less profitable than air. Additionally, investments in IT and new facilities have impacted margins. However, excluding these investments, margins would be around 6.6%.
Q: How is the competition evolving in the Air Express segment, especially with e-commerce players having their own logistics? A: The competition is increasing with more belly space available in commercial flights. However, Blue Dart's investment in its own network and aircraft helps maintain service quality, which is a key differentiator.