Blue Dart Express Limited (526612) Earnings Call Transcript & Summary

So good afternoon, everyone, and welcome to the interaction with senior management of Blue Dart Express. So firstly, I would like to thank the management for giving us the opportunity to host the call. So today, we have with us Mr. Sagar Patil, CFO; and Mr. Tushar Gunderia, Head of Legal & Compliance and Company Secretary, Blue Dart Express. I would now hand over the call to the management to provide some opening comments, and then we can take up the Q&A. Thank you, and over to you, sir.

Thank you, Alok, and good afternoon, everybody. A very warm welcome to all of you. As you are aware, the Board of Directors of the company at its meeting held on 31st of July 2026, approved the financial results of the company for the quarter ended 30th June 2026. The company reported revenue from operations of INR 1,658 crores as compared to INR 1,442 crores in the first quarter of 2026. Profit after tax for the quarter stood at INR 87 crores, reflecting disciplined execution and operational resilience despite the challenging external environment and higher operating costs. During the quarter, Blue Dart continued to leverage its integrated air and ground network, extensive domestic reach and technology-enabled operations to deliver reliable time-definite logistics solutions across industries. The results have already been uploaded on the stock exchange on the same day and also has been posted on the website of the company. I now hand over the call to Mr. Sagar Patil, our Chief Financial Officer, for further proceedings. Thank you.

Thank you, Tushar. Thank you, Alok. Good afternoon all. So this seems to be a good quarter where what we have kind of put ourselves for seems to be bringing positive indications in terms of numbers moving in the right direction. So with that backdrop, yes, I think we can start the questions session.

[Operator Instructions] So we'll take the first question from Mr. Krupashankar.

Congrats on good set of numbers. The first question was on more of a bookkeeping question. So can you just probably highlight the tonnage for the quarter and the parcels, number of parcels, et cetera?

Yes. So total tonnage was 364,000 tonnes, 364,430 tonnes and the number of shipments was 96.15 million.

Got it. So shipment number of parcel standpoint, the growth was hardly about 2%. And it's taking it from the tonnage standpoint, it's about 7%. So is it fair to assume that the e-commerce growth this time around was relatively lower and most of the growth has come in because of pricing action?

Yes, you are right directionally. There has been a good amount of growth in the -- from pricing from RPK, RPS point of view. The actions that we had taken for improving our yield in terms of looking at the loss-making lanes or loss-making customers in some of the products. As a part of GPI exercise this time, we also initiated those kind of price increases in some of the customers. So that has helped -- at the same time, as we saw in the last quarter, we were looking forward to a potential big increase in the price -- in the fuel prices. So April, May, June were characterized by that as we have a fuel price -- fuel surcharge mechanism, the fuel surcharge went up, helped us to neutralize the impact of fuel price increase. But as a revenue, ultimately, that was the -- I mean that also reflects in yield. So that is also one reason what would have reflected in the from a yield point of view.

Right. On your commentary on your e-commerce and ground business, what would have been the growth this quarter on a Y-o-Y basis? And in the air business if you can highlight what would have been the growth?

So this quarter versus last year, e-commerce would have grown by about from revenue point of view, more than 10%.

Okay. And ground, sir?

Ground as a B2B. So when we talk about e-commerce, it included a part of ground, but ground B2B has also grown by about 14%.

Ground B2B has grown around 14%. Got it. Got it. So air continues to be one segment wherein the tonnage growth is not happening, but it's more of reflecting on pricing. Is that assessment correct, sir?

Yes, to an extent, yes. The impact of fuel, which comes in both cost as well as revenue, but revenue seems higher from yield point of view.

Okay. Understood, sir. So directionally, just one point on the e-commerce business. Now given that we have seen a good growth in the underlying industry, the growth what we have reported is on a value basis is around 10%. So just wanted to get to know what is the disconnect? Are we losing some ground in some specific markets? Or has the market shifted from air to ground where probably we are losing some share. Any thoughts around this?

From e-commerce point of view, we have not been a very big player. We -- in the overall context, made up of both captive as well as the 3P players. Blue Dart has been, I would say, focused on not playing on the volumes, but ensuring what we get as a piece from e-commerce works well to synergize with our capacities and adds profitability to the bottom line. So quarter-on-quarter, there could be movements which could be seen as higher or lower than the market. But then again, we play between air and the ground e-commerce part of it. So yes so I'm not sure from industry point of view, again, within that, the relevant part of the industry, be it ground or air. Sorry, are you saying something?

No, sir. So what I was saying is that the same thing that given that industry has recently seen consolidation and there is a requirement for established players who can provide more solutions on the e-commerce side, isn't it the right time to capitalize on that opportunity and grow aggressively? So probably just wanted to get a sense around why it's not a core area at this point. And because you've already set up infrastructure on the ground side as well. Any thoughts around how we want to build this business going ahead? Because we do know that DHL had commented that they wanted to become a large piece of e-commerce pie in India. Over 3-year period. So just wanted to get a sense around how you want to build this business.

Yes. So e-commerce remains a growth driver among the other products, the surface, B2B and e-commerce. And within e-commerce, the e-commerce surface has been having highest rates of growth within our portfolio. Within e-commerce also, there have been a lot of development in some -- in terms of Q-commerce. Whereas we have been more of a bigger air player with ground growing faster coming close to the size of air. But as -- I mean, it remains a growth driver, but not a completely focused area where we want to -- where we may be a very big player will probably grow gradually and continue to make and build our niche in terms of providing where it is where the time premium quality is critical and not as probably a mass player as some of the other players would do.

We'll take next question from Mr. Raman.

Can you hear me?

Yes, Raman.

Follow-up on the previous participant. You mentioned that majority of the growth was because of the price increase and mainly on the account of cutting some loss-making clients. So have you taken any definitive price hike due to the increase in diesel cost?

So our price increase in terms of base price is a mix of general price increase that we do across big and small all the customers and also products. Then we also go specific on certain customers or for certain customers on certain lanes where we see that there is a match between the value and the premium. And as a result, we may be a low profit or a low loss or -- sorry, low margin or a negative margin. So we tend to go sharper there. So those are the activities that we have focused, I would say, more on in the last few months. But otherwise, it's not targeting any specific industry or vertical or a product. I mean it's a business as usual for us because the -- depending on how our capacity utilization, how our lanes, the seasonality, there are always cases of under and over utilization of the cost, which we again try to synchronize across the product. And where we see that there is a consistent gap or consistent opportunity to improve either our productivity or the price, we take that action either at some or both ends.

Just a follow-up on this. I just want to understand that during the last quarter and currently also the diesel prices have moved upwards drastically. So have we passed that on to the customer? Or will we be passing this in the coming quarters?

Yes. So specific to that, we do have a fuel surcharge related to local diesel prices, especially applicable for our surface business. So as an auto adjusting mechanism, when we look at the -- and this has been after a long time after, I think, 5 or 6 years or more, the local retail diesel prices went up by [10%] in the middle of May. So when they went up in the month of May, we would typically look at the impact or the prices for the month and then we revise our fuel surcharge for the next month. So I mean it's auto adjusting fuel cost neutralization mechanism that we have in place. So our prices for customers maybe to answer in short, yes, our prices would have gone up because of this surcharge going up especially after the month of May.

So is it fair to say that the price -- incremental price increase due to the fuel surcharge was not fully reflected in Q1, but will be fully reflected in Q2 -- from Q2 onwards?

Yes, I mean, let me clarify more on this. You spoke mainly about diesel. The substantial impact for us could also come from the air part of it, which is 60%, again, having our own capacity. And there, the Brent prices started going up from the month of, say, March, somewhere in the middle of March. So our fuel surcharge also started going up from the month of April.

And sir, you also mentioned in the opening comments -- sorry, in the first question with respect to yield improvement. Can you quantify how much was the yield growth part on Y-o-Y basis?

Difficult to pinpoint because we are made up of a number of different products mix of both surface as well as air and at the same time, right from documents to small packages to bigger parcels. So for some products, yield comes in terms of shipments more relevant for some it is by kilos. As I also mentioned in the last, I think, earnings call, typically, we look at a GPI realization of close to 4% to 5%, and that is how we've kind of on the plan net realization, I mean to say, depending on over and under trading customers after GPI. And top of that, we would have done certain specific price corrections with some of the customers to improve -- to make it sharper and also have positive margin impact.

Next one from Mr. Dhaval Shah.

Sir, I want to understand this 7% volume growth what we have done and also a bit of the past few quarters, how is the core manufacturing and the automobile sector performing for us? And given auto has done very well in this quarter and also for the last year and plus your kind of what sort of conversations you are having visibility you are seeing with respect to that sector growth. As I understand, the Express Logistics service is used a lot by automotive industry and Blue Dart had a very good market share in the past. So over the past 2, 3 years and going forward, how is this industry -- have we lost market share? Have we gained market share? How are we doing now? If you can give some overall perspective will be very helpful.

Yes. So we do play a role in the auto segment. It is one of the industry verticals that our revenue teams focus on and we deal with many of the major players in the market. In terms of the market share, again, difficult to quantify, I would say, because we are in a very niche kind of segment where we are not essentially a ground freight, but more of a ground express. So where it is critical -- time critical and urgent. So as auto industry as a whole, our share of volume would be relatively much lower, but we do see a good amount of traction even in the air movements of these players by some of the big players. While on ground, we have an express share of the business and not even PTL share of business, I would say. So we see -- I mean, again, for some customers, we see good amount of traction and some of the customers have also helped us to correct the prices when I spoke about the special price correction that we had. So we see a good amount of value being derived by the automobile industry. And yes, I mean, Express is such a product where it will not reflect significantly -- I mean, the elasticity with respect to the growth in the industry in general may be lower. That is if the industry is pretty large, the amount of Express would be relatively smaller given the criticality of some of the spares that may have to be moved. At the same time, even if the industry is stagnant or stable or even degrowing at times, the amount of critical movements again may not drop very significantly. So we play in a very niche kind of segment over there. And that is also one of vertical.

So how much auto would have grown for you in this quarter?

I don't have vertical wise numbers.

Maybe in the last 2, 3 years, how has auto in terms of growth? Because the underlying industry has been doing very well and more higher value cars are being sold, more electronics are there in the car. And I assume Express must be used for high-value logistics. So any understanding you can give us like -- I mean, FY '26, we had a good volume growth, even '25, we had a volume growth. So auto as a sector is growing at what rate for you?

I mean we see more growth from auto point of view in the surface B2B, which as a segment has been growing in high teens consistently in the last few years. So I would say auto would be somewhere in that range for us.

Growing at high teens.

Yes.

Okay. And last question, how much is now the BFSI, the card and the documents portfolio? How much would that be now for us?

From overall domestic point of view, yes, there...

At a company level, how much is our exposure to the documents and credit card and the BFSI segment portfolio? Maybe documents and card together.

Documents and card, especially the BFSI segment would be between 10% to 15% of total revenue.

Okay. So which was around 25%, 30% a couple of years ago, if I'm not wrong, right?

Not a couple of, maybe a little longer back. I'm talking about only BFSI. So otherwise, we do have express products that are carried as documents or smaller courier parcels along with documents. That would come to close to 25%, 30%.

So BFSI is around 10%, 15% and the other portion is 25%, 30%.

May all put together. So...

Okay. So this BFSI is now stagnates since a couple of years? Is that the case?

Previously, we do see some slowdown with the elongated cycles of credit cards, debit cards. I mean it's not a growing segment as such anymore. And anyway, last 3 years, we have been growing mainly in surface and e-com surface.

We'll take the next question from Mr. Achal.

Sir, you are on mute.

We'll take next one from Mr. Krupashankar.

Just couple of questions again on what would have been the mix on B2B and B2C this quarter, if you can share?

In terms of revenue, it remains at around 70%-30%, 70% being B2B and 30% being B2C, or 2% plus/minus.

All right. And air and ground as well, that mix is 1/3, 2/3 or has it changed?

No, no. So now air -- I mean, it remains between 60-40, 60 being air and 40 being ground from revenue point of view.

Got it. So then the question gradually which comes up, this quarter, of course, the profitability has been quite strong. And given that the mix is moving more towards ground and e-commerce because of higher growth over there. How do you see the EBITDA margins now shaping up at least for the near term, considering there are good tailwinds coming in with respect to volume growth? Any color around that, sir?

So I mean, our business is of combining a number of different types of products, their modes, their weight breaks. And typically, you would have seen in the second half of the year give a boost to the volumes, while also it puts a pressure on being ready from a resourcing point of view for peak. So our ability to flex across the products and also to flex with respect to we mirror the picking up of resources with the picking up of the customer or the market volumes will really define the way we drive our margins. I mean it's basically the -- I would say, the game of building efficiency in terms of flex in the resource versus demand. So that will define our course for the coming months.

Got it. Okay. Last question from my side on CapEx side, any change with respect to your CapEx plan? What would be the quantum of CapEx in the stand-alone entity and overall, including the aviation business?

As I mentioned in the last call, our CapEx is largely in the nature of, I would say, operating CapEx where being already covering -- having covered the country in terms of network, the CapEx comes more as replacement with expansion and very small amount of additions. So the CapEx -- the annualized CapEx may remain to the tune of INR 100 crores to INR 150 crores for the stand-alone. In aviation entity as well, the CapEx is largely in terms of either maintenance cycles or engine cycles of the aircraft. So that can really vary significantly depending on the engines come for the cycle or when do we plan those kind of maintenance as such. So unless we come and talk about significant plans of movement in the CapEx or I think the amount of depreciation that we book, maybe some 20%, 25% on top of that can be said to be an ongoing CapEx that we do as we organically grow this business.

Right. But historically, when I observe your stand-alone business, the nature of CapEx annually has been around INR 75 crores to INR 80 crores roundabout. Last year, you did add a lot of infrastructure or network of new hubs. And since you're also guiding INR 100 crores to INR 150 crores, can you throw some light around what are the new hubs or anything which are coming up over the medium term?

Yes. So we added 2 major hubs in North and before that, a couple of medium-sized hubs in East. We are working -- looking at opportunities of consolidating and expanding some of the hubs in South around Bangalore, possibly around Chennai and also in Mumbai itself. So may not be this year, maybe a few quarters away by the time they materialize.

We'll take the next one from Mr. Achal.

Am I audible, sir now?