Blue Dart Express Ltd

I now hand over the call to Mr. Sagar Patil, - Interim CFO, for further proceedings. Thank you.

Thank you. Tushar. /\nd good al'ternoon to all. I kilo. Alok. So as Tushar mentioned. in this financial year, as well as in this quarter. in the turbulent limes. the company has delivered a positive growth not only in terms of revenue absolute. but also in terms of volumes. And the significant investments that we have done in the last year has also been very wel I operationalized.

It has come to its normal level of operations by the end oC rather previous qua1tcr itself. So that hcing the case, we look forward as the economy grows further to improve the numbers both on top-line and bottom line.

Thank you. We can go to the ()&A session.

Thank you so much, sir. So anyone has any questions can either raise their hands or post in the chat ho" below. Yes sir. so as questions come in then: were some questions which had been posted in the Chat. One was on the volume data. il'you can provide the data on the volume for this quarter. Page 2 of 14

Yes, sure. For the quarter, right? Yes.

So in terms of the shipments. we had 91.94 million shipments for the quarter, and the weight 3,3 I, JO I tonnes.

Sure. And also the margins have actually come off quite a bit in this quarter as compared to the third quarter, so any particular reason which you would like to highlight here?

Yes. So typically, as you know, the third quarter is characterized by the volumes on account of festive season. So we have good uptick on our volumes typically in the October to December.

And then that to some extent, tapers down in the first quart1.:r of the month. So that's the n:ason why, as compared to last quarter, there would be a lower revenue as well as margin. Even as compared to last quarter, typically, since we operationalize our aircrafts in tht: first quarter of the last year, that is towards the end of January '24. So there wen: no fixed costs related to those aircrafts in the full first or the last quarter oflast year. Whereas, in this year that incn:mental cost of the aircran is there, though it is completely operational. and at the normal capacity, but with the service improwmcnt the typical unit cost per kg would he higher there. So that investment is playing its role in this quarter.

I lcllo, sir. J\nd congratulations for a good year. Sir, my question is; what would be the outlook for gmwth and EBITDA margin'! And can you give some specific highlights that why the EBITDA margins were down, particularly 8.3°'o? You explained that the investments were coming, but the same EBITLJA margins were 10.5% in whole fourth quarter of last financial year. And what will he the growth outlook for EBITDJ\ margins for bottom line. top-lim: volumes'! Thank you.

Yes. So as I said, thi: investment that we have done in last year comes at a cost. So while thi: volumes we arc able to get. the pricing also we will develop as the customers also realize the better transit time that we offer. So, yes, as that plays its role, it will improve. In terms or what would be the expected EBITDJ\ margin. that we would not like to comment. But yes, we will work towards improving it from this level. /\II right, sir. Sir any guidance with regard to how much CAPEX v.ill be undertaken? /\nd how the ne\\- Guwahati huh will be used for our growth trajectory'!

In terms ofC/\PliX, our CAPEX is largely into either replacement or upgradation or expansion of the capacities now that we are present all across the country. So there would be replacement in terms of servicing of the aircrall through the subsidiary Blue Dart division. or rcplaco:ment with increased size. And as far as Guwahati is c:om:crned, the loads going to Guwahati have always been there. So we are utilizing our aircraft mainly for that. And the volumes emanating from Northeast has also signilicantly improvt:d, helping us to utilize the aircran effectively. But Page 3 of 14 j{j; -ζ-

Ciot it. sir. Got it. Thank you, sir. I will come back in the qm;ue. Thank you, Saurabh.

We will take next question from J\nshul Agrawal. Please go ahead.

But these costs would he below the EBITDJ\ line item, right'! They wouldn't be impacting our gross cost, right'! Our gross margins haw contracted almost by 100 basis points in ()4. So, unclear about this whether this is the cost of sort of operating the aircrafl or is this something else?

So if you look at the standalone. then since these aircrafts are operated by our subsidiary, the standalone will have EBITDJ\ cost net or the tkpreciation bemuse it's all im;lusive cost, im:luding dcpreciation that gets charged. If you look at our consolidated, then th1.: margins would be highcr by about 1 think 5% to 6%.

No, sir. if! am not mistaken, even in standalone numbers I think gross margins have gone down from 31 % odd to 29% odd. J\nd similarly for EBITDJ\, as the previous participant pointed out.

EBITDJ\ margins have gonc down from 10.5% to 8.3°10. Is it that hecause we arc doing more surface this has happened? Or somdhing that is a one-off in this quarter other than these aircrall points that you mentioned?

Okay. So if I got this correct, sir. surface margins are not dilutive in nature to our consol lcvel, to our consol margins, did 1 get that correct? Yes, yes.

Okay. And second!> sir if I may, our lh:ightcrs arc operating now at optimal utilizations, you bt:lieve9 Or there's scope to grow these utilizations. which will also lead to margin benefits?

Rccausc I think we have been guiding that our freighters have reached optimal utilizations over the last one or two quarters, and hcncc margins were also stable. But just wanted to check on this point.

Yes. So the freighters arc hcing utilizcd at the, now level at which the earlier six frcightcrs were operating. In a network kind oforganization you will always have somc weak lanes, some closed lanes which arc related to positioning. So that thc nc1Ͷ aircrafts have also come to the same lc::vel of utilization. as we mentioned carlicr, between 85% to 90% as compared to the ovcrall llcct that we have.

Ciot it, sir. And any signs or any wcakncss in surface growth, last 4uartcr you gave us a breakup between your B2C and 82B volumes in terms of growth, would it be possible to share the same for this quartt:r or the full-year?

So as both the product lines arc improving, the ratio would mon: or less remain the same. I would say thc ground part, though we do not have segmented results as such, but generally what we scc as in terms of or differentiate in terms of transit times and not the mode of transport, thcrc would be increase of2% in the share of the slower or the ground transit time is what I can say.

Got it. But the last quai1cr I think you had shared B2C volume growth numbers and B2B volume growth numbers. If that is handy that will be useful for us to note.

So in terms of B2C, if you say from a wdght point of view, B2B growing at 10%, B2C growing at ahout I 9% for the quarter. <iot it. Thank you. I will fall back in qucue. Thank you, Anshul.

We will take next question from Mr. Mukcsh. Please go ahead. Page 5 of 14

Yes. Thank you for the opportunity. My Jirsl question is again on the surface husiness. we arc starting to see competitive intensity go up. Some of the other players have reported nov. strong volume growth. hut some hav,:n't. So. if you could kind of give us some sense on the competitivi: intensity on surface that you an: seeing right now?

On surface, so surface hoth on B2B as well as thee-com part of it remain our drivers of growth. while we do hem· lhat thi: c-com as an industry has slowcd down a hit But we are not a very big player here. We have a niche, and wherever we get good realization of our service quality. we do enter into those businesses. And we do sec the growlh remaining high for this segment.

And the pricing as wel I has kind of remained stable for you?

Yes. Now some amount of consolidation also prohahly is starting or happening. We do see a pricing position. We have taken successful pri<.:c increases with hoth big and small players. So we do remain in a strong position then:.

Okay. So the general price hike that you had announced in .January, I think before that you had announced that any customers that sign up in O<.:tobcr to December period will not be seeing that general prkc hike. And so now that we arc in say May, now what kind of pricing have we been able to pass through to the customers'? An) sense that you can give on that across both air and surface'!

Difficult to quote a general or average price, but there is no differentiation in terms of even the sizt: of the customer depending on how we sec th<.: protilahility pans for individual lanes or the product portfolio that we get. we do offer or agree on that pricing accordingly. So even that can he a big customer -- Y cs, Mukesh')

Right. Okay. So we do see that we can, I m..:an, the second half of this year we can still see some more price hikes with those customers'?

No that's not what I said. I am saying October to Dccemher. the new signups would anyway come at a new pricing.

Okay. They would have come at a new pricing.

So they would not he due for price inncase in the normal course. Page 6 of 14

Right. understood. And just lastly. hack to that question on freighter utilization. I think past few quarters, 1 think three or four quarters we have kind of commented that we arc yet to sec the optimum utilization. lfyou could, I know you did allude to it now in one of the answers, hut if you could kind of give us some sense on ho\\- much more time do you think wc can take to achieve this. on both, inbound and outbound, the utilization rates?

So I mentioned the utilization has reached optimum level.

But this is on both sides, sir? Because I think you had mentioned earlier that on one of the sides we arc seeing optimum, but not on the outbound especially, from say, Guwahati kind ol'.

Yes. So, so as far as Guwahati is concerned, even the outbound going from or originating from Gu\\ahati station has gone to close to optimum levels now. But overall load is of course optimum as compan:d to the other freighters. But even the cx-Guwahati lane is something that we started at a Vl!t), very low level when we started the operations without diluting much on the rates.

Otherwise load would have been available right from day one, hut we are not let the price get diluted there and we have reached at a good level of utilization there.

Okay. Great sir. Thank you. I will fall back in queue. Thank you Mukesh.

We will take next question from Achal. Please go ahead.

Yes. Good atlernoon, sir. Thank you for the opportunity. Sir, just on the volume growth. You mentioned ahout 4() for 132C and B2B, if you could indicate for the FY '25 as well, what has been the growth trend then:?

Sure. For 1328 and B2C you mt:ntioned, right? Yes.

Y cs. So for B2B. again, the growth has been at ahout 11 % in weights, and B2C for th<: full year has hccn at ahnut 11 % again. same.

Okay. Understood. So, if I look at th<: gross margins, again, I am coming hack to the question about what was asked earlier. if I look at 4Q FY '24 gross margin, 43.2%, I am talking from consolidated numbers. sir. And 4Q '25 is 41.4% despite the prict: increase. So, if you could help us understand what has driven this gross margin contraction at consol level.

And number two, in terms ot: is there any mix related impact or commodity related impact? And how much or the customers are linkt:d with th.: crude, given the crude has fallen? Ideally, the margin should have seen some improvement. So if you could elaborate a little hit on the same. sir. Page 7 of 14 CJ

Okay. So two questions. One, with respect lo the structure. Ir you note our volumes, the growth in the kilos is higher than the growth in shipments. So that will have an impact in the construct of the margin for this quarter. Second was, son-y, I missed your second. What was the next point?

See, in terms of the pricing structure, how many customers have the pricing estimation or indexation with crude or /\TF price?

Yes. So reduction in crude will not result in improvement in margin. because our prices do have fuel surcharge. So in case ii" then: is a drop in the crude, our fuel surcharge also comes down.

So, yes, there is auto mechanism over there. I mean. it helps us to protect from the price increascs in the crude. But at the same time, we give up that. we do not also benefit significant!)'. There is no big diffcn:ncc with the crude going up or down. /\nd this would be largely for the air fn:ight business. right, which would be 50%, 60% of our total revenue? Like, is ii applicable for all customers, or is it only for the air cargo we arc: talking about, sir?

So last year we did, I mean, last couple of' years. aircran of course was a big investment. We have also opened in the last I think first qua11er of the Financial Year '24-'25. big integrated facility with autosortcr near Delhi airport at Bijwasan. We also havc similar. larger consolidated facilities to come up in the next few quarters in different parts of the country, including in West, in South. So, yes, and these will be largely the leased assets. So there will be:: :;ome. of course.

C:APEX, but the addition you will find more in the Roll assets. Roll. the right ol"usc, yes, leased assets.

Understood. /\nd just one more question, if I may sir, in terms of the industry growth for surface and for the air. how has hccn the industry growth? ls it in sync with this. or is it lower than that?

I lave you gained market share'1 I lave you just maintained'' I lave you improved'! If you could give some sense, how are you looking at your own market share from last full year perspective, FY '25? Page 8 of 14

So, as far as air is conccrn.:d. the market share. we are already at a wry good market share over there, being probably the only express cargo. So. I am not awan: of any very recent market study that our comm.:rcial \HJuld have don.:. But I think we arc gaining the market shan: as far as surface is concerned, and also in the B2C e-tail business that is outsourced. Maybe it may not be very significant, we are still not a very big player there. But if you look at the growth in volumes, we should b.: gaining or keeping the mark..:t share stab!..:.

Understood. And do we sec that in terms of lhc mix changing in favor of surface, let's say over next three to four y..:ars. a m..:aningl'ul shiti or it will be broadly in sync with what happens with air cargo'1 We sec with the ground mode becoming more and more efficient, and also a variable model for us, we do not own assets over th.:rc in terms of the trucks. There is also a good variability or scalability there. We sec probably the ground should increase in terms of share, not dramatically, hut yes. there will be incremental I%, 2°/o be getting added over as we go along.

Understood. I have more questions, but I will fall back in the queue. sir. So thank you so much. Y cs. Thanks.

So we will take somc questions from the Q&/1. section. So, one is on the ROCE. So ROCE is almost at a decadal ltm. excluding thc COVID year. So how do we sec this moving ahead in tcrms ot: either we would sec margins moving up or can you comment on the pricing power it: at the industry level. the pricing powcr is coming down. any commmts on that'!

To some extent. ROCE will have impact due to the owned assets that we have got in last few years. Also. you cannot compare with the last two. three years which were post-COVID years.

So after the post-COVID years, we arc focused on improving our service efficiency. service quality. and also building up for the future, including the region like say Northeast, maybe a little ahead of the curve. which nov. we sec as we go along improving our realization as well as the value the customers see. So. I mean. it would be forward-looking, but optimistic statement, it would sound like that, Yl:S, from hen: on we should only improve our returns as well as the return on capital employed.

Sir, one question is on the mix of B2B and B2C in the curn:nt revenue pie. What would be the current mix sir. if you could share that. in the fourth quarter and for thi:: full-year?

For the full year, B2C is 27%, whcn:as B2B is 73%. In 1<;:rms of revenue? Page 9 of 14

In terms of revenue. yes. /\nd for the quarter, quarter is also similar number, 72.6% and 27%. so 73% and 27%. That's also because when we say the ground road network is the growth driver, it is in both ground B2B as well as R2C is where we are growing well. So the ratio in last I think number of quarters has always been like 70:30.

Got it. Also if you could provide this mix in terms of air and surface?

Air and surface. l do not have available readily, because normally these arc our modes or transit times, or not necessarily the modes as such. So now the mix would be more like 65:35, 65% would be air. and 35% would bc surfacc with Dart Plus or the c-tail going faster on surface. which earlier used to be around 70:30 again there. and now it is more of 65 :3 5.

Got it. So. sir. I also just wanted to understand. 1 mean. if you look at the last few quarters. the margins were more than 9% on the standalone basis, and just this particular quarter it has come below &.5'J!n, right? So I mean. the investments and all those things which you have done was being done since almost seven. eight quarters now. and which already we had reached a 9.5% plus kind of margins. So just wanted to understand what really happened in this particular qua1ter, and is it more like a one-of f or is this margin like a new normal with gradual improvement from here? Some color on that, hecause this quarter. particularly the margins have come off quite a lot.

Yes. All I can say that we will \\Ork towards improving this. otherwise it would he more or a forward-looking statement.

No, no. So l was asking. from this quarter perspective only, what actually happened in this particular quarter that the margins came down quite a lot as compared to 3Q or 2Q, or the previous two, three quarters'!

To an extent, I mean. the number of business days this quaiter were lower than as compared to the last year same qua11er, with last year also being a leap year. So, while it may look like only one. this is more like a I% impact on the business days while the cost remain for one quarter, where you have a though variable but for a month it becomes more like a fixed capacity. So that also has an impact to some extent on the numbers.

Sure. And just one last question in the question queue. I mean, just wanted to understand from the growth perspective now, so road logistics have been kind of weakish in the last fow quarters where. I mean, wc have still done heller than man) other players. So what is the growth outlook now on the volume side there, if we look at FY '26 and FY '27'! Is it more like a markd of a double-digit volume growth rate, or would it be more like a high single-digit growth rak environment with ce1tain price im:n:ase which we gcnerally take as a CiPI? Yes, if you can just comment on that. Maybe, for the industry level you can comment. and yes. just some comment would be helpful here. Page 10 of 14

We will take one question from Achal. Please go ahead.

Not very directly comparable at an overall level. When you say talk about air. we do havc a very large number of documents that we have, both from BFSI as well as non-BFSI, not only documents but also small packages that we carry. And yes. Hlue Dart is typically seen at a pn:mium. but with respect to the type or network that we ..:arry, a captive network, it calls for that kind of price increase.

So there is no direct data point, I am sorry. But as the ground network is becoming more and more efficient, 1 mean, right not only from the infra improvement point of view. also the GST. so the transit time on thi: road pennit. etc. is not tht:re anymore. We see on both sides, so there is at times stretch on the air price. but at the same time with the improved service quality offirst­ milc last-mile that we have, 1,1,c arc also able to fetch good price on the ground. so the yields also kind of compete with each other. So it depends on how customer secs. And given the large number of vc11icals of customers that we have. everybody ha!i a different way of perceiving the value and paying for it.

Right. But is it fair to say sir. like you said. road is becoming more efficient. And with the GST. do you sec basically shirt from air to road'? And that bringing down the pricing or the cost to the customer. and revenue for us, and hence the absolute margin'? While the percentage margin may Page 11 of 14

still be similar. the absolute margin per kg or per pared is actually lower, is that a fair assessment?

It's both ways. So in spite of road becoming cflicient. it' the customer still has need to send something on air for those criticalities, then the customer also would be willing lo pay more there. And it's not that we have increased or we arc increasing capacity very significantly. Even when we bought the new freighters. ii was not a fresh capacity created, but more like we replaced our variable capacity with passenger airlines with our own captive capacity as such.

So. while there may no\ be a vi.:ry dramatic growth in air from volumes point ol'vicw. but at the same lime the premium we arc still able to generate on air. So, we do no\ sec that kind of stretch. as you say, coming either on capacities. Even today, we do ship a good share of our air volumes on the commercial airlines, not only on the lanes where we arc not pn:sent. I mean, we service only dght stations, but even for those air stations we do carry a lot on commercial airline load, which may not be good .:nough 10 11)' our own aircraft. But then from a commercial airline load perspective. passenger airlines, we do have a significant amount or load then:.

Okay. And one more question, ii' I ma), sir. With respect to frdghter specifically, like how do you make that judgment with respect to addition or freighter? What is the ROCE threshold you look at? Given you said it doesn't n:ally change in terms orthc pricing for us. but if I look at it actually brings down the ROCEs, given it sits as part of the capital base?

And any plans lo add more freighters anytime soon, sir? Like hO\\ soon do we need to add. like is it in a year, two year, three year, live year?

We continuously keep on looking at those options. And yes, very difficult to forecast from that point of view as to not onl)' the addition, hut also changing of the network plan that we have for the existing freighter. So, yes, there is no such definite plan that we arc zeroing on at this point or time. Page 12 of 14

BLUEDAIT Understood. And just a clarification on that. in terms of what is the CAPEX which goes into one freighter typically, and what ROCE typically it adds to? Like one of the question earlier was with respect to decline in the ROCE is what we have seen in last three years, right'? So, if you could help us understand the economics of a freighter, what capacity. what revenue, and what ROCEs it typically generates on full utilizations?

So, very difficult to identity the ROCE from a freighter point or view because it only adds up into the existing m:twork, it's just one block in the entire network. There is no economics related to a specific freighter. So, primaril} the decision gets taken based on the service quality, if we arc falling short of the capacity, and i r you find more instances or our loads getting offloaded.

And at the same time. when the customer sign up. so if a customer signs me up, he would sign up for thi.: all India loads, including even local loads for that matter. So, even if the loads may not go from say Delhi to Mumbai, but if the customer is giving loads bi.:cause of that agri:cmcnt from Delhi to Luckno1,1, or Kanpur which might go actually on the road at times, it will be correct or incorrect to include that as a revenue accretion on account of freighter. So, it's the overall busim:ss network profitability that we look at. And freighter plays a role more as a capacity addition, and not as a fresh investment that gets the fresh revenue.

Understood. This is very helpful, sir. And in terms of. if I sec the overall numbers, just to make an overall assessment. basically it's a business as usual, there is no one-off in terms of the cost. revenues, etc. And we are looking at a steady performance even in the coming quarters. In fact, margins could sec further improvement with the operating leverage. 1 Jave I understood it right? Yes, you can say that. Y cs.

Perfect sir. This is very, very helpful, sir. Thank you so much. Thank you.

We will take next question from Ra_jashree. Please go ahead.

Yes, hello. Yes, thanks for the opportunity. Som, question is regarding your air freight volume.

So, let's say, if you move 100 tonnes in your freighter planes, how much is outsoum::d? So other than the I 00 tonnes, let's say, that we move in your planes, ho1,1, much is outsourced to these passenger carriers as belly cargo? What would be that number, on average?

BlUEDART Yes. Oka,. That's hdpful. Thank you.

Thank you. Just the last couple of questions we will take from the chat box. Why has the volume growth not translated into revenue? So. basically on the net realization, is it like the prict: hikes have not been absorbed across the hoard or any other particular reason?

Yes. So as we mentioned, om: is this year is impacted by thi: improvement in the utilization as we started the new rout..:s with the ne\'.- aircrafts. Yes. the price realization has started improving. and it is expected to improve fw1hcr, continue to improve.

Sure. So I think we arc almost out ofti1m: now and we have dosed with the questions also. So 1 will now hand over the call to the management for any closing comments.

So nothing spedlk. 1 mean unless you haw, t\lok, or any oflhc investors have.

Sure. I think, yes. investor questions have been answered, so an)' follo\\-UP questions we will directly conned with you. sir. Thank you so much for allowing us to host the call, and I look forward to host you again.

Thank you, /\lok, for organizing. Thank you so much. Thank you so much, Alok. Thank you all. Thank you all. Thank you. Page 14 of 14