Buy Transport Corporation of India; target of Rs 200: ICICI Direct
ICICI Direct is bullish on Transport Corporation of India has recommended buy rating on the stock with a target price of Rs 200 in its research report dated May 04, 2020.
June 05, 2020 / 11:07 AM IST
ICICI Direct's research report on Transport Corporation of India
In spite of lower revenues due to weakness in supply chain business (mainly automobile sector) and Covid-19 impact, the company has been able to sustain its EBITDA margin owing to its diversified portfolio of value added services spread across varied customers & industries. TCI’s ability to provide multi modal integrated logistics solutions helped it to continue serving existing customers as well as acquire several new engagements.
On the EBITDA margin front, we expect the positive momentum to continue driven by higher share of LTL business in freight division and enhanced utilisation and better pricing in the shipping division. With multi-modal capabilities, we believe TCI has developed a strong moat around its business and thereby has the ability to deliver sustainable growth rates. On an SOTP basis, we value the company at Rs 200/share with a BUY recommendation on the stock.
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