Buy Transport Corporation of India Ltd For Target Rs.1,353 By Geojit Financial Services Ltd
In-line performance...outlook intact
Transport Corporation of India Ltd. (TCI) is one of the largest integrated players in the organized logistics industry. Key business segments include freight, supply chain, warehousing solutions, & shipping services.
• TCI reported a 9% YoY revenue growth in Q1FY26, slightly above the expectations, driven by strong double-digit growth in the supply chain business and stable performance in Seaways.
• EBITDA grew 17% YoY, with margins expanding 70 bps to 10.6%, supported by lower fuel costs. Consequently, net profit also rose 17% YoY.
• One ship was dry-docked in Q1, with two more scheduled in Q2 and Q3, which may temporarily impact Seaways volumes. Management has guided for 0–5% revenue growth in the Seaways division for FY26.
• We revise our FY26 EPS estimates downward by 12–15% to factor in the impact of dry docking. Post revision, net profit is expected to grow at a 12% CAGR over FY25–27E, with stable margins around 10.7%.
Outlook & Valuation
TCI’s long-term outlook remains strong, driven by economic growth, rising ecommerce, and expansion into high-growth segments like chemicals, EVs, and cold chain. Asset-light freight operations, integrated services, and increasing LTL share will support profitability. With new ships expected over the next two years, the Seaways segment is poised for further growth. We maintain our confidence in TCI’s growth trajectory. We value TCI at 20x FY27E EPS and upgrade to Buy from Accumulate rating with a target price of Rs.1,353.
Key Concall Highlights
• Management remains confident of achieving 10–12% revenue and profit growth, supported by diversified growth drivers and strong execution.
• Capex planned for FY26 amounts to Rs. 450cr, targeting fleet expansion, warehousing, and multimodal logistics.
• With two new ships expected by FY27, Seaways is set to add 15,000–20,000 tonnes of capacity, with no scrapping planned until FY28. • Supply chain solutions are expected to grow at 15% CAGR, driven by automotive, chemicals, EVs, and warehousing.
• The company continues to expand its multimodal logistics footprint, with 625 rake movements in Q1 and increasing terminal infrastructure supporting green logistics. Strategic investments in AI, control towers, and tech startups (~?30 crore) are enhancing operational efficiency and customer experience.
• Cold chain and JV businesses are gaining traction, with CONCOR JV growing 33% and cold chain JV expanding 18–20%.
• TCI maintains its asset-light model in freight, with a focus on increasing LTL contribution to improve margins.
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