Buy TCI Express; target of Rs 1,410: Sharekhan

Sharekhan is bullish on TCI Express has recommended buy rating on the stock with a target price of Rs 1,410 in its research report dated May 10, 2024.

Broker Research

May 16, 2024 / 12:02 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Sharekhan's research report on TCI Express

TCI Express reported marginally lower standalone revenue at Rs. 317 crore, down 2.8% y-o-y, owing to a 2% y-o-y decline in overall tonnage volumes to 2.58 lakh tonne. Further, standalone OPM at 14.1% (down 245 bps y-o-y) came in lower than our estimate of 15% mainly led by higher-than-expected other expenses (driven by CSR-related expenses). Hence, standalone operating profit at Rs. 44.8 crore, down 17.2%, came in 9% lower than our estimate. The decline in revenue and OPM led to standalone net profit declining by 17.8% y-o-y at Rs. 31.6 crore (8% lower than our estimate).

Outlook

TCI has been affected by a sluggish macro environment, although it has performed well vis-à-vis industry peers. The company remains on track to achieve profitable growth, although some volume gets sacrificed in the near term. The continuous expansion by setting up new sorting centers and automation of existing centers, addition of new branches, and scale up of new businesses would provide an 18% net earnings CAGR over FY2024-FY2026E. Further, TCI has a strong balance sheet, healthy cash flow-generation capacity, and high return ratios. We retain our BUY rating on the stock with a revised price target (PT) of Rs. 1,410, factoring in the downward revision in estimates and expecting a growth revival from FY2025.

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