Blue Dart earmarks 1-1.25 bln rupees as capex in 2011

News Clip:www.in.reuters.com

26th May, 2011.

Logistics firm Blue Dart Express said on Thursday it has earmarked 1 to 1.25 billion rupees in 2011 for investments in air and ground infrastructure.

This compares with an investment of about 1.1 billion rupees made in 2010, it said in an e-mail to Reuters.

Blue Dart, in which DHL Express holds about 81 percent, is the market leader in the air express space. It is also rapidly expanding its ground services network.

The firm plans to add an aircraft on lease to its fleet of seven Boeing aircraft later this year and also expects to expand its retail store presence across the country to 1,000 by 2015 from about 400 now.

"All the investments have been made from internal accruals. We are a zero debt company," said Ketan Kulkarni, Vice President of Marketing at Blue Dart.

He said the organised air and ground express business was estimated to be between 36 to 40 billion rupees in 2011 and the segment was expected to grow at double digits annually for the next 4-5 years.

The firm, which follows the calendar year, reported a 52 jump in Jan-March net profit.

However, costs such as fuel, manpower and electricity have been on the rise and the firm has increased retail tarrifs by an average of 12 percent in 2011 to counter inflationary pressures, Kulkarni said.

"We have a transparent and accepted mechanism to mitigate the risk in fuel costs, that is the fuel surcharge mechanism, which is accepted by our customers also," he said.

Blue Dart shares ended up 0.86 percent at 1,362.75 rupees in a firm Mumbai market.