Neutral TCI Express; target of Rs 710: Motilal Oswal

Motilal Oswal's research report on TCI Express

TCI Express (TCIE)’s 4QFY25 revenue decreased 3% YoY to INR3.1b (+4% QoQ), in line with our estimate. Volumes declined 1% YoY in 4QFY25. Volumes were hit by slower growth in the SME segment. EBITDA stood at INR263m (-41% YoY/-9% QoQ), 16% below our estimate. EBITDA margin came in at 8.5% in 4QFY25 vs. our estimate of 10.1%. Rising toll fees and labor costs continued to weigh on operational efficiency. The impact of lower margins was offset by higher other income, which resulted in an APAT of INR194m (-39% YoY) vs. our estimate of INR206m. During FY25, revenue stood at INR9b (-4% YoY), EBITDA at INR984m (-31% YoY), EBITDA margin came in at 10.9%, and APAT was INR667m (-33% YoY).

Outlook

We expect TCIE to clock an 8%/ 10%/23% volume/revenue/EBITDA CAGR over FY25-27. We reiterate our Neutral rating with a revised TP of INR710 (based on 20x FY27 EPS).