ICICI Direct is bullish on Transport Corporation has recommended buy rating on the stock with a target price of Rs 350 in its research report dated May 18, 2018.
ICICI Direct's research report on Transport Corporation
Revenues grew 26% YoY to Rs 605 crore (I-direct estimate: Rs 558 crore). Supply chain and shipping were key growth drivers during the quarter with YoY growth of 33%, 61% to Rs 244 crore, Rs 74 crore (I-direct estimate: Rs 230 crore, Rs 67 crore), respectively. Moreover, freight segment grew 15% YoY to Rs 298 crore (I-direct estimate: Rs 264 crore) Operating costs, employee expense and other expenses continue to remain at subdued levels, which contributed 182 bps to EBITDA margins to 10% (I-direct estimate: 9.6%). The resultant EBITDA grew 54% YoY to Rs 61 crore (I-direct estimate: Rs 54 crore) PAT grew 76% YoY to Rs 33 crore (I-direct estimate: Rs 28 crore). Higher other income for a fourth consecutive quarter at Rs 9.4 crore was partly offset by an exceptional loss of Rs 4 crore during the quarter (impairment of foreign subsidiary)
TCI remains under-valued compared to its peers, providing us comfort. We have a BUY recommendation on the stock and maintain our target price of Rs 350.
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