Geojit Financial Services is bullish on Blue Dart, Abbott India
Blue Dart is an 81pct subsidiary of the DHL Group, Shah said. "The company has posted excellent December quarter results. It plans to compliment and widen service offerings. It has launched a new surface express product in CY07 called Dart Surfline, which is expected to grow 40-45pct per annum."
Abbott India is a 65pct subsidiary of Abbott Inc USA, he said. "The company's numbers are in line with expectation. It provides healthcare services through business units. The parent company Abbott Inc is a leading player globally and is focused on pharma."
Q: What makes you so bullish on Blue Dart? Is it the sector as a whole or the fact that they had a stellar set of December numbers?
A: It is basically the sector considering the kind of growth potential. If you consider the number of MNC plans that are coming into India, logistics business is supposed to grow going forward from hereon. Considering the capex cycle that corporate India has, the entire sector in logistics looks quite good, whether it is Blue Dart or certain other reasonably low-end players.
Blue Dart is a 81pct subsidiary of DHL and is one of South Asia’s most integrated courier and logistics company. It also has the benefit of covering 220 countries, considering it is an 81pct subsidiary of DHL. Also, the distribution service spectrum is about to witness a fair amount of growth from hereon.
Blue Dart has been in the domestic market for a very long time and also has the expertise to deliver. Considering that companies like Tesco, Wal*Mart and Carrefour are opening their retail outlets in India, the services provided by Blue Dart would definitely tend to grow, keeping in mind the kind of retail boom we are seeing.
We have a price target of Rs 750 on Blue Dart over a one-year timeframe. Possibly, if you have a stretched out timeframe, it can even get better from hereon.
Abbott India is a 65pct subsidiary of Abbott Inc. USA. Abbott India provides healthcare solutions to its three segments – primary care, specialty care and hospitality care. The parent company Abbott Inc has got good number of products in its pipeline and is well poised to take advantage of the patent when it unfolds in India.
Considering the kind of growth that the healthcare business can possibly see in India, I think the topline and bottomline would definitely benefit. Abbott could possibly well be poised to leverage the parent company’s product line-up. We have a price target of about Rs 630 with a one-year timeframe.
Q: The volumes on both these stocks are dismally low. How would you explain the kind of price rise or interest in the counters on such low volumes?
A: With Abbott especially, it has traded only on BSE. In case you are a one-year plus kind of an investor, then these kinds of volumes should not make much of a difference, because you are not taking a trading call over here. The volumes are definitely low on both Abbott as well as Blue Dart. But if you have a delivery perspective and a one-year timeframe, then these kinds of low volumes should not deter you from making an investment.
Of course, the sectors that both these companies are placed in, tends to grow from hereon, on the domestic consumption growth story. So, considering these two points, volumes should not deter you from making an investment call on these two companies.
Q: Any disclosures?
A: No personal holdings. But since our company has got a buy report on both, our clients might be holding their positions in the two companies
