Sharekhan's research report on TCI Express
TCI Express Limited (TCI) reported broadly in-line performance for Q2FY2023, although operating margins surprised positively. The company generated Rs. 46 crores CFO during H1FY2023 with strong net cash position of Rs. 84 crore. The company retained its revenue growth guidance for FY2023 at 18-20% y-o-y while it expects similar growth run rate for FY2024. However, OPM is targeted at 17.5% and over 18% for FY2023 and FY2024 respectively. The company would be investing Rs. 500 crore over FY2023 to FY2028 for setting up five new sorting centres and automation of 10-11 existing sorting centres.
Outlook
We retain Buy on TCI with a revised PT of Rs. 2,250, rolling forward our valuation multiple to September 2024 earnings and considering its strong profitable growth path over FY2022-FY2025E.
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