Accumulate Transport Corporation of India; target of Rs 1248: Geojit Financial Services

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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 organized logistics industry. Key business segments include freight, supply chain, warehousing solutions, & shipping services. Revenue grew by a healthy 15% YoY, which was in line with our expectations, led by healthy growth in freight and supply chain, which reported healthy double-digit growth. EBITDA grew by 19% YoY, and margins expanded by 30bps YoY to 10.3%, which was marginally below our estimates on account of higher operating costs. Net profit grew by 27% YoY, led by margin expansion and a higher share of profits from JV (24% YoY). Going ahead, stable volumes from freight business, strong growth from Ecommerce, and supply chain businesses, led by improving consumer sentiments will drive growth. While better volumes from Seaway business will support margins. We expect PAT to grow at a 16.1% CAGR over FY25E-27E, with stable margins of ~10.5%.

Outlook

We continue to maintain a positive view on TCI given its well-diversified service offerings, a multi-sectoral presence, and a healthy balance sheet. We value TCI at a P/E of 18x as we roll forward to FY27E and maintain Accumulate rating with a target price of Rs.1,248.

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Transport Corporation of India - 30012025 - geo