Logistics Sector Update : All trucks in fast lane by PL Capital
Quick Pointers
* DELHIVER IN’s express volumes to be at 293mn.
* TCIEXP IN to report mid-single digit growth in volumes while MAHLOG IN’s EBITDA loss in B2B express division is expected to compress to Rs43mn
For our coverage universe, we expect revenue growth of 19.1% YoY in 4QFY26E. B2C parcel volumes for DELHIVER IN typically witness a sequential dip in 4Q after having peaked in 3Q due to festivities. However, we expect DELHIVER IN to buck this trend and report B2C parcel volumes of 293mn (flat sequentially) in 4QFY26E. MAHLOG IN is also expected to report steady performance as M&M’s auto volumes (excluding exports) are up 25.8% YoY in 4QFY26E. As for TCIEXP IN, the growth momentum evident in previous quarter is likely to continue and volumes are expected to increase by 4.7% YoY. On the operating profitability front, EBITDA of our coverage universe is likely to increase by 40.1% YoY led by
1) B2C parcel volume kicker for DELHIVER IN
2) Narrowing losses in the B2B express division for MAHLOG IN
3) Rising operating leverage benefits arising from volume growth for TCIEXP IN. MAHLOG IN is our top pick in logistics space and we retain BUY on the stock with a TP of Rs406 (23x FY28E EPS) amid anticipated turn-around in the B2B express business.
DELHIVER IN’s B2C parcel volumes to remain flat on sequential basis: DELHIVER IN’s topline is expected to grow by 25.0% YoY to Rs27.4bn led by 44.6%/19.6% YoY growth in B2C/PTL segments respectively. Historically, DELHIVER IN’s B2C volumes witness a dip in 4Q after having peaked in 3Q due to festivities. However, we expect B2C parcel volumes to remain sequentially flat at 293mn in 4QFY26E, indicating consolidation in market share post-acquisition of E-com express. Further, PTL volumes are anticipated to rise by 17.7% YoY in 4QFY26E while the service EBITDA margin is likely to remain in early double-digit territory of 11.0%. We expect E-Com integration cost charge of Rs300mn and adjusted EBITDA margin of 5.1% in 4QFY26E. We maintain “BUY” on the stock with a TP of Rs526 (35x FY28E EBITDA; no change in target multiple).
Volume momentum continues for TCIEXP IN:
TCIEXP IN is expected to report volume growth of 4.7% YoY to 2.67 lac tonnes for the quarter. After having struggled in recent past, this is the second consecutive quarter where we expect TCIEXP IN to report midsingle digit volume growth. Realization is expected to remain flat at Rs12.1/kg while EBITDA margin is likely to be at 10.2%. We maintain “BUY” on the stock with a TP of Rs694 (19x FY28E EPS; no change in target multiple).
Bottom-line likely to be in black for 2 nd quarter in a row for MAHLOG IN: MAHLOG IN is expected to report 13.7% YoY growth in top-line led by steady performance in the core 3PL segment. Revenue from Lords Freight, MLL Mobility and B2B Express business is expected to increase at a healthy pace, driving overall top-line growth. We expect EBITDA losses in B2B express division to narrow from Rs116mn in 4QFY25 to Rs43mn in 4QFY26E. Consolidated EBITDA margin is expected to be at 5.3%. After having turned black at the bottom-line level in 3QFY26, we expect MAHLOG IN to continue with the momentum and report PAT of Rs76mn in 4QFY26E. We maintain “BUY” on the stock with a TP of Rs406 (23x FY28E EPS; no change in target multiple).
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SEBI Registration number is INH000000933
