Sharekhan's research report on TCI Express
TCI Express Limited (TCI) reported better-than-expected performance for Q1FY2023, barring OPM, which lagged estimates on account of weak gross margins. The company generated Rs. 35 crores CFO with strong net cash position of Rs. 104 crore. The company lowered its revenue growth guidance for FY2023 to 18-20% y-o-y versus earlier 20-22%. However, OPM is targeted at 18%, considering Q1 an aberration due to seasonality. The company incurred Rs. 33 crore capex towards purchase of land for setting up 2 lakh square feet Kolkata sorting centre. Automation at Pune sorting centre is expected to be completed by Q2FY2024.
We retain Buy on TCI with an unchanged PT of Rs. 2,170, considering strong profitable growth path over FY2022-FY2024E.
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