Hold TCI Express Ltd For Target Rs.576 by Prabhudas Liladhar Capital Ltd
Resurgence in volumes continue
TCIEXP IN reported a broadly in-line operational performance with EBITDA margin at 10.0% (PLe 10.1%) while volumes grew by 7.3% YoY to 250,000 MT (PLe 248,000 MT). The surface express business reported a growth of 8.7% YoY driven by customer additions, higher wallet share from existing clients and steady demand from pharma, manufacturing, EV & engineering sectors. Ancillary segments like rail express, air express, C2C and e-commerce services also registered a healthy performance in 1QFY27. With price hike taken in June-26, margin trajectory will be keenly eyed from hereon. Overall, we expect volume CAGR of 7% over the next 2 years along with EBITDA margin of 11.1%/12.1% in FY27E/FY28E. Given the recent rally in stock price, we downgrade our rating to HOLD (earlier BUY) with a TP of INR576 (19x FY28E EPS; no change in target multiple).
Revenue increased by 9.3% YoY:
Revenue increased by 9.3% YoY to INR3,134mn (PLe INR 3,063mn). Gross margin stood at 27.5% (PLe 28.6%) with a fleet utilization of 84.0%
EBITDA margin at 10.0%:
EBITDA increased by 12.0% YoY to INR314mn (PLe INR309mn). EBITDA margin improved by 24bps YoY to 10.0% (PLe 10.1%). PAT increased by 5.2% YoY to INR205mn (PLe INR188mn) with a margin of 6.5% as against a margin of 6.8% in 1QFY26. Bottom-line was higher than our expectation due to lower-than-expected depreciation and interest expense of INR70mn/INR8mn (PLe INR90mn/10mn) respectively.
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