Buy Transport Corporation of India; target of Rs 320: ICICI Direct
ICICI Direct is bullish on Transport Corporation of India has recommended buy rating on the stock with a target price of Rs 320 in its research report dated February 04, 2021.
February 10, 2021 / 05:02 PM IST
ICICI Direct's research report on Transport Corporation of India
Transport Corporation (TCI) reported a strong set of Q3FY21 numbers. Revenues grew strongly QoQ (up 17%) and YoY (10.5%) to Rs 715 crore. SCM segment reported strong growth both QoQ and YoY (up 19% QoQ, 24% YoY), followed by the freight division (up 18% QoQ, 2% YoY) and shipping division (up 11% QoQ, 5% YoY). EBITDA margins expanded 86 bps YoY to 10.5% mainly due to higher gross margins (19.5% vs. 19% in Q3FY20) and lower employee to sales ratio (5% vs. 5.7% in Q3FY20). Resultant EBITDA grew 20% YoY to Rs 75 crore. Further, PAT grew 25% YoY to Rs 40 crore (exceptional expense of Rs 10 crore impacted profitability to certain extent).
We value the stock at Rs 320/share and maintain our BUY rating on the stock (earlier target of Rs 280/share).
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