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On track for sustainable growth

* Diversified service offerings (Freight, Supply Chain, and Seaways), coupled with sectoral resilience, helped TRPC maintain double-digit growth in 1HFY25. Total revenue grew 11% YoY in 1HFY25, supported by double-digit growth across business segments (11%/13%/17% YoY in Freight/Supply Chain/Seaways), despite margin pressures in Freight and Supply Chain.

* In Seaways, TRPC expects capacity utilization to remain high in 2HFY25, with only one dry-dock planned near FY25 end.

* Over FY21-24, the supply chain business has delivered a 16% revenue CAGR, aided by robust automotive demand. The segment is expected to maintain the double-digit rate given stable demand in the auto industry, as well as the retention and expansion of businesses with existing clients.

* The freight division is likely to benefit from a higher LTL contribution (40% by FY26E vs. 36% in Sep’24), a shift from the unorganized sector, and traction in multi-modal logistics. We expect a revenue CAGR of 14% over FY24-27.

* With a well-diversified logistics portfolio and strong multimodal infrastructure, TRPC is well positioned to capitalize on India's expanding logistics needs. We expect TRPC to achieve a 15% revenue CAGR over FY24-27, driven by continued growth in the supply chain division, a rising proportion of LTL shipments within the freight division, and a presence across the multi-modal logistics value chain (including a JV with Container Corporation for rail transportation). We reiterate our BUY rating with a TP of INR1,290 (based on 18x Sep’26 EPS).

Higher capacity utilization and addition of new ship(s) to boost growth

* In the Seaways division, revenue increased 17% YoY in 1HFY25, with EBIT margin improving ~400bp YoY to 30%. This improvement can primarily be attributed to higher freight rates and availability of all six ships during 1HFY25.

* The company is in the process of acquiring two new ships, with delivery expected in 2.0-2.5 years. It is also open to purchasing second-hand ships in the near term, though this seems less likely given the current circumstances.

* We expect the seaways business to post a 13% revenue CAGR over FY24-27.

* Over the long term, management aims to increase the capacity in this business by 50% and expects a sustainable EBITDA margin of 30%.

Supply Chain to be key growth segment for TRPC

* The Supply Chain division saw strong growth of 13% YoY in 1HFY25, despite mixed trends in key sectors such as automotive, FMCG, FMCD, and quick commerce. The division has successfully leveraged sector-specific demand, particularly in warehousing and multimodal logistics services. This demand is supported by the expansion of TRPC’s hub-and-spoke network, especially for automotive logistics, enabling efficient distribution across regions.

* The business operates with a strong asset base, including ownership and lease of modern warehouse facilities totaling 15m sq. ft. Additionally, the company has a customized fleet of over 5,500 trucks and trailers, stainless steel tank containers, and other physical assets.

* This is expected to be the fastest-growing segment for TRPC due to continued growth in the auto segment and opportunities in the defense and EMS sectors. We expect the Supply Chain business to report a revenue CAGR of 16% over FY24-27.

High proportion of LTL and branch network to aid growth in Freight business

* TRPC operates over 4,600 trucks and has 25 strategically located hubs across India, which enable its freight division to expand its distribution network and improve reliability in cargo consolidation and transportation. Further, TRPC intends to open 75 new branches for its Freight business in FY25 (32 added in 1HFY25), in addition to 30 branches added in FY24.

* TRPC reported 11% YoY growth in its freight services in 1HFY25, driven by network expansion.

* The freight division is likely to benefit from a higher LTL contribution (40% by FY26E vs. 36% in Sep’24), a shift from the unorganized sector, and traction in multi-modal logistics. We expect a revenue CAGR of 14% over FY24-27.

Valuation and view

* TRPC is benefiting immensely from being a multi-modal logistics provider. It is the only player in the domestic logistics industry that offers services across road, rail, and sea. TRPC’s established infrastructure, long-standing customer relationships, and experienced management team should boost its position as a preferred 3PL partner.

* We expect TRPC to deliver a CAGR of 15%/19%/18% in revenue/EBITDA/PAT over FY24-27. We reiterate our BUY rating on the stock with a TP of INR1,290, based on 18x Sep’26E EPS.

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