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* TCI reported good set of numbers for the quarter under review with revenue from operations increasing by 13.0% year-on-year to 9,321 million on a consolidated basis. The Freight division reported a revenue growth of 16.3% YoY driven by high volumes and stable freight rates; Supply Chain division reported a revenue growth of 27.0% YoY driven by growth in automobile transportation; Seaways division reported a decline in revenue growth due to slow demand amid monsoon, dry-docking & lower international volumes during the quarter. The management has retained guidance for revenue growth of 10% - 15% for FY23.

* The CONCOR joint venture reported a marginal growth of 1.7% and the cold chain business reported growth of 13.5% in the half yearly. Some amount is seasonal and some of the new businesses that are coming in cold chain will get added on the next few months. The Trans System joint venture has done exceptionally well with a 76% growth, in line with the automobile industry growth.

* On profitability front, the EBITDA from operations for the quarter declined by 8.2% year-on-year to 960 million with an operating margin of 10.3%. Profitability was impacted as three ships went on dry docking during the quarter. The company achieved the reported PAT of 723 million, a decline of 4.3% year-on-year with a net margin of 7.8% translating into EPS of 9.31 per share.

* TCI is a technology enabled diversified multi-modal logistics company having operations across road, rail and seaways. It will benefit from National Logistic Policy which aims to reduce logistic cost, digitization and standardization. Further, infrastructure development such as terminals, ports, railway corridors, etc under Gati Shakti program are major tailwinds for the logistics sector. This will help the logistics industry to better productivity, efficiency and reduce loses in the system.

* Though container rates have come down by 30-40% globally, ship prices have not come down by that much. Hence, TCI has deferred its plan of purchasing a ship by couple of quarters. The company plans to invest 1,250 - 1,500 million in other aspects such as trucks, construction of hub centers, technology, etc.

* We continue to remain positive on the company on back of its strong business, technology enabled operational capabilities, diversified multimodal network, good operating margins, strong balance sheet with negligible debt and industry tailwinds supported by various government initiatives. We maintain our rating on the stock to BUY, with a target price of 920 per share.

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