See 15-20% bottomline growth in FY19; E-way bill to formalize logistic sector: TCI

Transport Corporation of India had a very good third quarter as the seaways division performance was heartening.

Vineet Agarwal, MD, TCI said the seaways division performed well due to addition of a new ship. The ship moves cargo on the west coast of India from Mundra to Cochin.

Whenever we add a new ship, the revenue growth go up and so, the objective is add a new ship every 18 months, said Agarwal. The company is looking at adding a new ship early next year. Therefore, margins for the seaways division will continue to be around 25-30 percent, said Vineet Agarwal.

The revenues in Q3FY18 were up 24.3 percent at Rs 555.3 crore versus Rs 446.7 crore in Q3FY17. The year on year (YOY) EBITDA was up 40.1 percent at Rs 52.62 crore from Rs 37.57 crore. Margins for the quarter came in at 9.,5 percent versus 8.4% YoY.

The core supply chain business did well but margins are around 6-6.5 mark. Agarwal said the segment has now settled post goods and services tax (GST). Moreover, the business saw a push during the festive season because the segment does a lot of movement for automotive sector.

Moreover, multinational companies close their books at end of December and so the business sees a nice thrust.

Overall, there is a pickup in demand and so expect Q4 to also be good, said Agarwal.

Expect 15 parent topline and a 15-20 percent bottomline growth in FY19. Meanwhile, revenues for the low margin freight division to growth between 8-12 percent, said Agarwal.

E-way Bill for the company per se is good because it formalizes the logistic sector and bring the person who is sending and receiving the cargo as part of the integrated chain.