Blue Dart Express Limited (BLUEDART.NS) Earnings Call Transcript & Summary

So, good afternoon, everyone and welcome to the interaction with the 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 and Compliance and Company Secretary. I would now hand over the call to the management team to provide some opening remarks on the performance, and then we can start with the Q&A session. Thank you, and over to you, sir.

Yes. Thank you, Alok, and good afternoon all. A very warm welcome to all of you. I would like to inform you that Mr. Sagar Patil, Interim CFO, has since been appointed as Chief Financial Officer with effect from today, that is 1st August 2025. And most of you may be aware, Sagar is already associated with Blue Dart Express for last more than 8 to 9 years. As you are aware, the Board of Directors of the company in its meeting held on 29th July 2025 approved the financial results of the company for the quarter ended 30th June 2025, and the company declared the financial results for the quarter ended 30th June 2025, wherein the company posted revenue from operations of INR 14,419 million and profit after tax of INR 469 million for the quarter ended 30th June 2025. Blue Dart continues to build strong momentum, driven by substantial traction across both B2B and B2C products. Blue Dart marked a major milestone with the launch of India's largest integrated operating facility at Bijwasan in New Delhi, further enhancing our operational capabilities in the service efficiency. Additionally, the company recently announced the expansion of its network with the introduction of Guwahati last year as a direct flying location. This strategic move was driven by Blue Dart's vision to empower Northeast Asia -- Northeast India, a zone that plays a pivotal role in the country's economic growth. Furthermore, Blue Dart was awarded the Best Express Logistics Provider 2025 by the Institute of Supply Chain Management. In addition to this industry recognition, Blue Dart was also certified as Great Place to Work for, for the 15th consecutive year, an acknowledgment of our unwavering commitment to fostering a culture of trust, inclusivity and excellence. By consistently investing our infrastructure and people, Blue Dart continues to strengthen its position as both the logistics partner of choice and the employer of choice. The results have been already uploaded on the stock exchange websites and also posted on the company's website. I now hand over the call to Mr. Sagar Patil, CFO, for further proceedings. Thank you.

Thank you, Tushar. Good afternoon all, Sagar Patil here. So we have closed another quarter with a healthy growth on revenue backed up by good growth in kilos, as well as shipments. We have closed the quarter at a consolidated level with a EPS of INR 20.5 per share. And yes, this is the normal business or results for the quarter. And yes, we are looking forward for rest of the year. And yes, we can start with the questions.

Sure. So first, we'll take the first question from Mr. Krupashankar.

First of all a bookkeeping question. If you can share what would have been the tonnage for the quarter as well as the number of parcels transported?

Sure. So the number of parcels was 94.1 million and the tonnage was 340 or 340068 tonnes, thousand tonnes.

Yes. Sir, one follow-up question on that. So as you can see that on a sequential basis, the tonnage has improved. And also the total parcels have also increased quite well. But if you look at margins, the decline has been quite sharp, what was around -- on a consolidated basis, about 15% and on a stand-alone basis, about 8% to 9% has dropped to about 7% and close to 13.5%. So just wanted to get some sense on, what are the key reasons why the margins are weaker? And is there any one-off related costs in this profitability, what you have reported?

The EBITDA margin has been 15.63% in last year same quarter, which is now 14.15%. So there is a drop of about 1.5% there. No one-off, but what we see and also all the products are trending the trajectory. What we see is more of a change in the product or the customer mix, some products going faster. As you can see also last few couple of quarters, we have been growing faster in kilos as compared to the growth rate in shipment. So, we see heavier parcels coming more. So, with the heavier parcels, the element of, I would say, the freight as we see goes higher as compared to the service when it comes to the smaller parcel. So we see that shift typically, so there is no major business loss or gain for any specific customers. I mean, beyond the materiality threshold. However, we see that shift happening within the customer and the product or the lane mix that we see, weight mix as well. Yes, it's a complex network with multiple locations, multiple modes that we operate in. So sometimes the customer mix may cause a percent here and there in terms of the profitability as it derives. So yes, other than that, there is no one-off that has impacted this profit.

Understood, sir. So nothing to do with the recently commissioned facility in Delhi because there should be some ramp-up cost attached with it. So is that something which is potentially dragging your margins until the ramp-up reaches an optimal level? That's not a reason.

That's not the reason. I mean, yes, there is a new investment that has come in. But in the overall scenario, it is not as significant as it will impact the margin as a percentage, yes.

Understood. One more question which I had was with respect to growth what we would have reported on the B2B, as well as B2C. If you can share that, that would be really helpful.

So yes, I mean, we do not have segmented results as such, but from the point of view of products per se, B2C is the e-com or e-tail segment as that we say, I mean, as we call. Growth is largely driven by both in B2B as well as B2C. But yes, B2B also includes products like air parcel or documents. In B2C, we see revenue growth of about 20%. And in B2B, it's about 2.4% for the quarter.

That's quite material. I think -- but in the previous comment, you also mentioned that there is a higher growth in heavier shipment parcels as well. This is on a Y-o-Y basis we are talking about, right, sir?

Yes, yes, yes, yes.

So we are getting higher portion of heavier shipments in B2C as well. Is that understanding correct?

Within B2C, if you look at it, there is no significant change in the kilos per shipment profile in our both ground as well as air segment of e-tail. Within B2B surface, which is a higher KPS as compared to air or documents, so that is where the KPS would go up. But as far as B2C is concerned, there is no significant change in the profile.

Sir, we'll take next question from Mr. Achal Lohade.

Sir, if you could help us understand in terms of the freighters, the number of freighters, how many of these are owned, [ stock ] leased? And b, if I look at the tonnages, what we report in the annual report, that seems to be fairly similar for last 4, 5 years. If you could just clarify as to how it works in terms of these tonnages, how do you compute that? Is that only for the owned or is that owned plus leased? Or is it the tonnages is for the -- even what you ship through the other passenger lines?

Yes, sure, Achal. So we have total 8 freighters. We have 6 - 757 and 2 737's, of this one 757 is leased, whereas the rest of the 7 are owned ones. So that's the profile of the freighters. In terms of tonnages, what we report as tonnages is including all the products as we build to the customers. So whether we fly them on our own aircraft or our trucks or the commercial airlines. So these include all the products. In fact, just to add also, these are all build kilos. So for example, if there is a shipment going from place A to B, there can -- these are essentially multimodal movements from door to door. So partly, we may also move on road the same shipment. But when we report, these are reported as -- we build kilos because customer will be billed only once for the total weight of the shipment.

Understood. Understood. And if you could help us understand in terms of the aircraft utilization for the quarter, how do you see it growing? And I see that -- and if you could help us understand in terms of the growth in surface versus air for the quarter in terms of revenues?

Yes. So in terms of the -- sorry, the first question was one about...

Yes. In terms of the revenue growth in surface, stock air.

Okay. Yes, yes. So the surface growth, which includes both e-tail, as well as the surface B2B, the growth has been 13% in sales, whereas in air, it has been 2.2%. Yes, your first question one was about the capacity utilization of the freighter. So, this has been consistent around -- between around 85% plus or minus. So our capacity utilization is in terms of how do we fill our aircraft in terms of the weight that we carry on the pallets and not in terms of the number of hours that we fly for. So essentially, these are the flights that fly essentially at night to carry the daily picked up shipments, that's it. So there can be different ways of looking at aircraft utilization for us. It is supporting our express movement. So we calculate based on the loads that are being loaded on the aircraft when it flies. So -- and also the way we operate our network is that we ensure unless there is a load available, be it weekend or holiday or weekday, we would not fly the aircraft because we also have a good amount of network on the commercial airlines, the belly loads that we carry.

Got it. And if you could just clarify on the lease arrangement, sir. So out of 8, you said 1 said is leased, everything else is owned. Have I understood right?

Right, yes.

Okay. So if you could help us understand in terms of these cost, how does it work for the owned versus leased? And how do you make the decision between whether to purchase aircraft or take it on lease?

So we had most of our aircrafts leased at some point of time, I think few years back. We converted them into -- from lease to buy. Essentially, even when we lease the aircraft, the requirements related to maintenance, approvals, statutory approvals, these are all to the account of the leasing. So we found them more beneficial by leasing -- sorry, by owning rather than by leasing because the interest element was proving out to be better. From a balance sheet point of view also, even if you lease, they are accounted as a ROU asset in the balance sheet. So it doesn't make your balance sheet light as such. So from that point of view, we converted them from lease to buy some time back.

Understood. And just one last question, if I may. In terms of fundamentally between air and surface, is there a difference in terms of ROCE profile? I understand last time you said margin, there isn't a big difference between the 2. But how about the ROCE?

From ROCE point of view, I mean, there are 2 elements. One is return and then the capital employed. So capital employed for air would typically be higher because of the captive assets that we have. So the ROCE would be relatively lower as compared to surface.

Understood, understood. And just, yes.

You had also one question as in terms of the kilos or the weights have been little more or less on the same lines since last few years.

For past few years, yes, sir, yes, tonnages basically, yes.

One reason that '21, '22 and financial year, including even '22, '23, we had done lot of charters during post-pandemic times. So that had taken our kilos really on a higher level. It was more of a pandemic impact where we had to -- we could fly large number of kilos across the countries as well as within the countries. And now after '23, '24 onwards, it is a normal business that we are in.

We'll take next question from Mr. Dhruv Jain.

Yes. Sir, my first question is that if you could provide the mix between B2B and B2C as a percentage of consolidated sales, how much is what segment?

So for this quarter, it is 71% and or 71% and 29%. B2B is 71% and B2C is 29%.

And how has that trended over the last few years, sir?

Last -- so it was around -- last year same quarter was around 74% to 26%. So we have seen the share of B2C going up, but it was around the same between 70s and 30s in the earlier quarters as such, yes.

Sir, broadly, what would be the margin differential between the 2 segments?

Margin across the products would be more or less same on the same lines, I would say. The yield would be different, but the margin percentage would be similar, yes.

Okay. And sir, optically looking B2B growth seems quite low in this quarter. So just wanted to understand how should we think about this segment's growth over the next, say 2 to 3 years? And why such a smaller number in terms of growth in this quarter?

So we do have -- we would have plans to grow the B2B business as well, especially driven by the surface. On air, we have captive capacity, and it is also optimally utilized unless we have opportunities for doing day flights either for charters or so I mean, it would be a forward-looking statement, but I would say that we are also looking for growing our B2B segment faster. Surface, B2B, we do not have a very high market share. We are not #1 over there. So there will be plans to ramp up that business along with, of course, B2C on ground, as we call a [indiscernible] plus we used to call it. So I mean, there is plan on both the segments.

And sir, in the B2B segment, if I may, if you could just split what would be the air mix and the road mix, the surface mix?

Air would be slightly higher in terms of revenue. So, 71% may include about maybe 35% of air and no -- close to 40% would be air and 30% would be surface.

Sir, we have one question in the chat box. So the first is on the margin side. So margin actually had come down in the quarter if you look at the stand-alone basis. So what's the view ahead? Should it improve from here on? Or any color you can throw on the margin side?

Yes, I mean, without making a forward-looking statement, but yes, we -- there is also seasonality that comes in wherein we have second half characterized by the peak loads that come in. So the focus in first half is typically to maintain and plan for the maintaining the service quality when the peak volumes come in. So yes, we would be working towards improving the margin. But this is a normal business that we have had in this quarter. And yes, the effort will be to improve the margins.

Sure. We'll take next question from Mr. Nirmal.

So my question is, in one of the responses you mentioned that the fall in EBITDA has been a result of change in customer mix. So if you can elaborate on that, what kind of customer mix has the company got, sir?

So it's a mix of number of factors, including the -- at times maybe high margin or high I mean the mix of customers, the product mix as well as lane mix. So if the customers who provide you good volume and enjoying better pricing if they ship more or if the customers who ship with you a higher kilo or KPS product versus a lower kilo product, so the service element in the product involved, if that goes up and down, then the margin can also move accordingly in a short term.

And sir, what was the reason in other expenses this quarter, there is write-off about 25% Y-o-Y?

So other expenses would include, say, rentals wherein we had implemented or we had added Bijwasan last year around -- I think this quarter, part of the quarter, that spend was not there. So that will be one small reason over there. Communications, there will be some increase, but not a big number. We have implemented some automated tools for call bridge where we have invested some amount there.

Okay. Sir, should we – sir, this should be the green sort of normal going ahead like, should we see this going ahead for the next quarters also?

So in terms of absolute, this may not go down, but this will support the incremental volumes as the business goes up with continued growth, as a percentage to revenue, it can improve.

Okay, sir. Sir, one last question on number of shipments, if you look at the growth in the number of shipments, growth in the number of shipments and also tonnage for the past three years, while growth has been positive, the growth rate Y-o-Y has come down from about 24% to 5% in shipments and 24% to 11% in tonnage? What would be the reason there?

Yes. That is where if the higher kilos per shipment, heavier parcels grow faster, these are characterized by more of a freight element, I would say, that the customer look at it. So that is where the rates become more competitive, whereas the smaller lighter shipments would have more of a service component from a door-to-door efficient, timely delivery point of view. So that is where the value perceived and paid for by the customers would be higher for a lighter shipment. So if your kilos go faster, as compared to shipments in a given period, there can be some dilution in the margin. Again, depending on -- along with that comes the lane mix, customer mix, et cetera.

We'll take next question from Mr. Anshul Agrawal.

One clarification, sir. What is our B2B and B2C growth numbers for the current quarter Y-on-Y, I missed that number.

Yes. So for B2B, the revenue growth was 2.4% and B2C was 20.2% in revenue.

Got it. I understand that we don't break down our revenues in terms of air and surface. But in general understanding, would B2C see a larger share of surface? Or is it more restricted towards air only?

So the share of air has been more in B2C, but our ground or B2C also, in fact, has been the growth driver. So the share of ground has been also growing. The ratio is between now 16 is to 11 between air and ground on B2C in revenue.