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In-line performance; outlook remains bright

* Transport Corporation of India’s (TRPC) revenue grew 9% YoY to ~INR11.8b in 4QFY25 (in line). TRPC’s revenue growth was driven by the supply chain business, which recorded a growth of 22% YoY in 4QFY25.

* EBITDA margin stood at 10.3% in 4QFY25 (+20bp YoY and flat QoQ) vs. our estimate of 10.8%. EBITDA grew 11% YoY at INR1.2b, while APAT grew 9% YoY to ~INR1.1b (in line).

* Supply chain revenue grew 22% YoY, while the freight and seaways divisions reported ~3% and 7% YoY growth, respectively.

* EBIT margins for freight/supply chain/seaways divisions stood at 2.3%/6.0%/ 36.4% in 4QFY25. EBIT margins for the freight and supply chain businesses contracted 70bp and 40bp YoY, respectively, while EBIT margin for the seaways business expanded ~1,000bp on a YoY basis.

* For FY25, revenue was INR44.9b (+11.6% YoY), EBITDA was INR4.6b (+12.3% YoY), EBITDA margins stood at 10.3% (+10bp YoY), and APAT was ~INR 4.1b (+17% YoY).

* TRPC’s 4QFY25 performance was in line, driven by growth in supply chain and seaways divisions. While supply chain growth would continue in FY26, seaways will see flat to marginal growth due to ship dry docking. Freight services should gain momentum with increased infrastructure spending and improved consumption. With limited capacity in the seaways business due to dry docking, revenues and earnings growth could be lower than earlier estimated. We cut our EPS estimates for FY26/FY27 by 9%/10% and reiterate our BUY rating with a TP of INR1,330 (based on 20x FY27E EPS).

Warehousing drives growth in the supply chain business; muted growth expected in the seaways and freight businesses

* TRPC’s freight division, operating through 25 hubs, saw ~3% YoY revenue growth in 4Q FY25 due to weak demand. The business added 40 branches in FY25 and plans 50 more in FY26. Focus remains on the high-margin LTL segment, which contributed 36% of revenue and is targeted to reach 40%. Management expects an 8–10% revenue growth in FY26 and anticipates FY25 as the bottom.

* The supply chain business continued its robust growth trajectory, supported by new and expanded contracts, especially in warehousing, quick commerce, and automotive logistics. Margins held firm despite cost pressures. TRPC expects 12–15% revenue growth in FY26.

* TRPC’s seaways segment saw muted cargo volumes in 4Q FY25, but higher freight rates supported revenue growth of 7% YoY. Fuel prices remained stable, helping protect margins. The company plans to dry-dock three ships (one already completed) in FY26. While volume growth is expected to stay flat, higher realizations may drive revenue.

* TRPC remains open to acquiring second-hand vessels if market conditions turn favorable.

Highlights from the management commentary

* Management expects the freight business to bottom out in terms of margins and RoCE profile, and sees some volume pick-up from SME customers.

* TRPC witnessed good traction in warehousing, quick commerce, and multimodal services. Warehousing remains a strong growth driver, with 1m sq. ft. added in FY25, increasing total space to 16m sq. ft. TRPC now services 85 dark stores, particularly supporting quick commerce growth.

* For FY26, TRPC targets consolidated revenue and profit growth of 10–12%, driven by factors like the China+1 strategy, the Production-Linked Incentive scheme, and government infrastructure investments.

* TRPC plans INR4.5b capex, largely funded internally. The festive season is expected to boost demand, and it is diversifying into aviation and defense logistics while exploring joint venture opportunities with growing traction.

Valuation and view

* TRPC stands out as the only domestic logistics player offering road, rail, and sea services, backed by strong infrastructure, customer ties, and experienced management, positioning it as a preferred 3PL partner.

* With muted growth expected in the seaways segment due to the dry dock of ships, we cut our EPS estimates for FY26/FY27 by 9%/10% and expect TRPC to deliver a revenue/EBITDA/PAT CAGR of 15%/20%/12% over FY25-27. We reiterate our BUY rating on the stock with a TP of INR1,330, premised on 20x FY27E EPS.

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