Blue Dart

Blue Dart has an advantage of complete control over shipments and schedule given its own fleet. It has a very strong yield and ROCE focus and hence does not invest in businesses which give a low yield (It has ROCE greater than 10% in almost its entire history). As a result, Blue Dart does not have presence on the low value e-commerce delivery though it is a preferred partner in high value deliveries given its reliability which is critical for high value transactions. Blue Dart has relatively low penetration in ground shipments, which improvement in land infrastructure of India could aid the company to expand rapidly.

Blue Dart Express provides logistic services through surface (land) and air cargo each of which contribute nearly 50% to its Rs. 3300 crore revenue. Both sales and EBITDA margin have grown consistently. Blue Dart delivers consignments to over 35,000 locations in India (It has a coverage of 14000 pin codes out of the total of 19100 pin codes in India).

Blue Dart is the only logistics company in India which owns its own airline fleet (6 aircrafts) which flies across major cities and hence has complete control over its delivery schedule.

As part of DHL Group, Blue Dart accesses the largest and most comprehensive logistics network worldwide, covering 220 countries and offers services including air express, freight forwarding, supply chain solutions and customs clearance. This also gives Blue Dart an access to the global best practices and an edge in terms of innovation.

It is headed by home grown management, for example Balfour Manuel, current MD has been with the company for 35 years and has risen through the ranks and hence is probably one of the mostly richly experienced professionals in the logistics space in India.

Blue Dart engages with employees frequently through various channels and has identified key employee priorities such as career building and growth training. Blue Dart outsourced majority of its last mile delivery to save on costs, but it ensures service delivery quality by providing exceptional training and defining service delivery quality parameters even to its outsourced staff. Blue Dart is reputed in the industry for the quality of its field staff.

The Size of Logistics Industry in India is $215-billion. The logistics industry in India is highly fragmented with a large number of 10- 15 percent owned by organised players. The increased industrial activity, internet connectivity, infrastructure improvements and government reforms (GST/ National logistics policy/ National cargo policy/ freight corridors) will aid this sector and it is expected to grow at a CAGR of 10.5%. China logistics grew at a CAGR of 12% from 2001 to 2018.

Traditionally, Blue Dart has always invested ahead in technology and has one of the best technology systems which aid it in better service delivery. It is the pioneer in introducing the latest technology trends within the industry space where it provides services like track shipments anytime/ anywhere, location finder, price estimators, pickup scheduling. With a customer base which is generally addicted to Blue Dart and its reliability, Blue Dart also has a very strong sales and marketing team.

The key risk for Blue Dart will be defending the market share it has on air express market with resumption of belly cargo players, though Blue Dart has an advantage of complete control over shipments and schedule given its own fleet. We expect Blue Dart growth to taper off from 15% CAGR currently to 12% CAGR from 2025 as a result of this risk.