Neutral TCI Express; target of Rs 785: Motilal Oswal

Motilal Oswal's research report on TCI Express

TCI Express (TCIE)’s 3QFY25 revenue decreased 5% YoY to ~INR3b (10% below our estimate), while volumes declined 3% YoY. Volumes were hit by slower growth in the manufacturing, automobiles, and consumer durables sectors. The quarter also saw several challenges, including higher costs from multimodal enhancements and the impact of high inflation on customers. Volumes stood at 0.24m tons (-3% YoY), while realization was INR12,226 per ton (down 2% YoY). EBITDA came in at INR289m, with a margin of 9.8% (vs. our estimate of 12.1%). TCIE faced cost pressures in its Air Express division along with slower growth in key sectors, thereby adversely impacting the business. In line with weak operating performance, TCIE’s APAT dipped 40% YoY to INR192m (our est. at INR268m).

Outlook

We cut our EBITDA/PAT estimates for FY25 by 14% each to incorporate the weak 9M FY25 performance. We also reduce our EBITDA/PAT estimates for FY26 by 17% each and for FY27 by 14% each, given the industry headwinds. We expect TCIE to clock a 4% volume CAGR and 6%/4% revenue/EBITDA CAGR over FY24-27. We reiterate our Neutral stance on the stock with a revised TP of INR785 (based on 22x Sep-26E EPS).

For all recommendations report, click here