Buy TCI Express; target of Rs 921: ICICI Securities

ICICI Securities's research report on TCI Express

TCI Express’ (TCIE) Q3FY25 EBITDA of INR 289mn was 22.9% below our estimates. Key points: 1) Volume declined 3.2% YoY due to subdued demand. 2) EBITDA margin slipped to 9.8% (lowest since Q2FY21) on account of a volume dip, higher operating costs and unabsorbed fixed cost. 3) Broader capex plans of INR 3.1bn for Q4FY25–FY27 reiterated. 4) Board declared a second interim dividend of INR 6/share. Based on 9MFY25 performance, we slash our FY25E/FY26E EPS by 17.6%/19.3%.

Outlook

We roll forward our valuation to FY27E; however, given the higher risk on earnings due to a continued weak outlook, we lower our target multiple to 28x (vs. 34x). Our revised TP stands at INR 921 (vs. INR 1,200). Retain BUY.