Key highlights

Blue Dart Express is into business of air express and ground service. It undertakes the entire air express domestically, while the international part is taken care of by its Parent, DHL. It also undertakes the inbound services of distribution of consignments coming from international markets from its Parent and all the inbound services of consignments going international, up to bringing the consignment to the door of Parent, which takes care from then on. The company thus through its group companies, associates and its Parent is present in the entire door to door service, both, air and ground service.

Blue Dart Aviation in which Blue Dart Express has 49% stake is a fully dedicated freighter for Blue Dart Express. It does the entire inbound and outbound services including ground handling, custom clearance etc, only for Blue Dart Express. It is because of the regulatory requirement, that there requires a different company in aviation business. Blue dart aviation has 7 freighters and plans to add one more by early CY 2011.

In air express market in India, the company has market share of about 44%. The focus remains largely on Tier 2 and 3 cities where stupendous growth is coming and many shippers and large customers have already established their base.

In ground service business, the company has market share of about 9% of the total organized market of about Rs 1700-1800 crore in India. The company is slowly increasing its market share, which was around 5%, couple of years back.

According to the management, GST implementation will be a big game changer for the company both in ground service business and in air expresses business as well. What currently happens is because of different point of tax and at different rates, there requires various warehouses, some outside the geographical boundaries, far distant from direct distribution centers. With GST implementation, a single tax regime will prevail which ensures few concentrated warehouses thus ensuring higher productivity and lower cost for companies like Blue Dart. This will make organized players like Blud Dart more competitive compared to unorganized players and help garner more market share.

The company is very optimistic about its growth potential in future. If GDP of the country continues to grow around 8-8.5% and spending on infrastructure continues to be the priority of the government, then the company can easily grow around 20% every year. The more the infrastructure improves, the more the communication and logistics are required and more is the business for Blue Dart.

The postal bill is yet to be decided by the government and this is pending for last 4 years. For the time being, the government is studying the impact and has asked for various recommendations from the industry players. So there is no clarity at this point of time.