Buy TCI Express; target of Rs 1900: Sharekhan

Sharekhan's research report on TCI Express

Earnings slightly missed the mark in Q2FY2024 although a sequential recovery in revenue growth and OPMs in a muted demand environment is well taken. It has undertaken a 1.5% price hike during Q2FY2024 till date. Company retained FY2024 guidance expecting strong H2FY2024. It retained a Rs. 1,750 crore revenue target for FY2025 although Rs. 2000 crore in revenues cannot be ruled out. It is looking at M&A deals. Automation at Pune on track by March 2024. Target 25-30 new branch additions in H2. Capex for FY2024 and FY2025 at Rs. 80 crore and Rs. 100 crore, remain unchanged.

Outlook

We retain a Buy on TCI with an unchanged price target (PT) of Rs. 1,900, factoring marginal downward revision in estimates while rolling forward our valuation multiple to September 2025 earnings.