Geojit Financial Services research report on Transport Corporation of India
Transport Corporation of India Ltd. (TCI) is one of the largest integrated players in the organised logistics industry. Key business segments include freight, supply chain, warehousing solutions, & shipping services. Revenue grew by a healthy 10% YoY, which was above our expectations, led by freight and supply chain businesses, which reported healthy double-digit growth. EBITDA was flat YoY, and margins dipped by 90bps YoY to 10.1% on account of softness in the seaway business and higher fuel costs. Net profit grew by 25% YoY, led by higher profits from JV and other income. Looking forward, we anticipate stable volumes in freight, Ecommerce, and supply chain businesses, while seaway business is expected to improve gradually with the addition of a new ship.
Outlook
We expect PAT to grow at a 15% CAGR over FY24-26E, with stable margins of ~10.5%. We value TCI at a P/E of 18x on FY26E, given the healthy earnings outlook and return ratios; hence, we maintain an Accumulate rating on the stock with a target price of Rs.1081.
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