Buy Transport Corporation of India; target of Rs 1,200: Sharekhan

Sharekhan is bullish on Transport Corporation of India has recommended buy rating on the stock with a target price of Rs 1,200 in its research report dated July 29, 2024.

Broker Research

July 30, 2024 / 10:19 IST

BUY

26 Aug, 2025 12:21

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Sharekhan's research report on Transport Corporation of India

TCI reported an in-line consolidated revenue, led by sustained growth in SCM and JVs along with pick up in seaways. OPM was a tad lower owing to lower margins in freight, while PAT beat was led by lower depreciation and higher other income. Management has retained its overall topline and bottom-line growth guidance of 10-15% y-o-y, led by healthy momentum sustaining in SCM and JVs, while freight starts showing growth and seaways stay flat to up 10% y-o-y. TCI has signed two new ships for USD 38.8 million, which are expected to be delivered by December 2026. Additionally, it continues to scout for second-hand ships.

Outlook

TCI is expected to witness a softer demand environment in its freight business in the near term, in line with industry peers, led by increased competitive environment. However, its SCM business and operations in JVs are expected to remain strong. Further, the addition of two new ships in seaways is expected to drive earnings from FY2028, while it continues to scout for second-hand ships. TCI’s multimodal capabilities and exposure to almost all major end-user industries place it in a much more comfortable position vis-à-vis peers. We introduce our FY2027E earnings in this note. The stock is currently trading at a P/E of 17x/15x its FY2026E/FY2027E earnings. We retain BUY on the stock with a revised SOTP-based price target (PT) of Rs. 1,200, as we roll forward our valuation to H1FY2027E earnings.

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