Assignment-1

Course Code - FINM551

Course Title - Corporate Finance-2

Submitted to - Dr. Mahesh Sarva

Academic Task No - 1

Date of Allotment -: 4. Dec.2021

Date of Submission - 24. Dec.2021

Section - Q2146

Name Registration no. Roll no.

Reet Gill 12112240 Q2146B41

BLUE DART EXPRESS LIMITED

Evaluation Date and Signature: Teacher sign:

Introduction
Blue Dart Express is an Indian logistics company that provides
courier delivery services. It is head quartered in Mumbai ,
Maharashtra. It has a subsidiary cargo airline , Blue Dart Aviation that
operates in south Asian countries. In 2002 Blue Dart had a business
alliance with DHL Express and on 8 november 2004 , DHL Express
invested 120 million in it , and since then has been a major
shareholder in the company. Blue dart access the most and the largest
comprehensive express and logistics network worldwide , covering
over 220 countries and territories and offers an entire spectrum of
distribution services including air express , freight forwarding , supply
chain solutions and custom clearance.
The blue dart team derives market leardership through its motivated
people force , dedicated air and ground capacity , cutting-edge
technology , wide range of innovative , vertical specific products and
value- added services to deliver unmatched standards of service
quality to its customers. Blue dart’s market leadership is further
validated by numerous awards and recognition from customers for
exhibiting reliability , superior brand experience and sustainability
which include recognition as one of the top 25 best employers in India
2016 by AON Hewitt , voted as a superbrand , listed as one of fortune
500’s india’s largest corporations and forbes india’s super 50
companies and voted readers digest most trusted brand to name a few.
Blue dart accepts its social responsibility by supporting climate
protection (gogreen) , disaster management (gohelp) and education
(gotech). Its vision is to establish continuing excellence in delivery
capabilities focused on the individual customer.
Leverages
 Operating leverage
 Financial leverage
 Combined leverage

2021
EBIT = 188.62
Sales = 3279.70cr.
EBT = 156.90

2020
EBIT = 49.05
Sales = 3166.39cr.
EBT = 16.91

2019
EBIT = 143.70
Sales = 3165.46cr
EBT = 128.35

2018
EBIT = 237.37
Sales = 2790.85cr
EBT= 211.78
For 2021
% change in Ebit = -139.57/188.62*100 = -72.93%
% change in sales = -113.31/3279.70*100 = -3.45%
% change in Ebt = -139.99/156.90*100= - 89.22%

OL = -72.93/-3.45 = 21.13
FL = -89.22/-72.93 = 1.22
CL = OL*FL = 21.13*1.22 = 25.7786
Interpretation: in this case FL is greater than 1 , so in the year
2021 this company is a pure levered firm.

For 2020
% change in Ebit = 94.65/49.05*100 = 192.96 %
% change in sales = -0.93/3166.39*100 = -0.029 %
% change in Ebt = 111.44/16.91*100 = 659.01%

OL = 192.96/-0.029= -6653.79
FL = 659.01/192.96 = 3.415
CL = OL*FL = -6653.79*3.415 = -22722

Interpretation: Here FL is greater than 1 that means the

company has a pure leverage , but the CL is in negative that
means that company has invested using borrowed funds and
borrowed money has a greater cost or higher interest rate.

For 2019
% change in Ebit = 93.67/143.70*100 = 65.18%
% change in sales = -374.61/3165.46*100 = -11.83 %
% change in Ebt = 83.43/128.35*100 = 65%

OL = 65.18/-11.83 = -5.509
FL = 0.997
CL = OL*FL = - 5.49

Interpretation: in this case the FL is less than 1 which

indicates that the management has adopted a very good
approach towards the debt capital.