TCI Express shares gain 2%, Motilal Oswal sees more room for upside

In the recent disclosures for Q4FY23, the company reported net sales of 326.25 INR while the EBITDA rose to 55.81 crore INR, up 6.7 percent year-on-year.

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TCI Express shares jumped over 2 percent intraday on June 12. At 1.05pm, the company's stocks were trading at Rs I684.55, up 2.17 percent, on the NSE.

The Gurugram-based logistics company is expected to improve its revenue by 13 percent and EBITDA by 21 percent in FY23-25, as per broking firm Motilal Oswal's estimate.

In the recent disclosures for Q4FY23, the company reported net sales of Rs 326.25 crore, while the EBITDA increased to Rs 55.81 crore, up 6.7 percent on-year.

Ranked sixth in terms of the market capitalisation, TCI Express is a logistics major with a pan-India reach. A strong B2B service model which accounts for 95 percent of its business and an ambitious expansion plan, is expected to bolster its competitiveness, the brokerage firm's recent report said.

Also read Midcap Magic | Market favours TCI Express as new services and high-margin business to add to muscle

For FY23-25, the company aims to improve its revenue by 13 percent and EBITDA by 21 percent, aided by automation and transition from rented to owned facilities.

In the preceding FY23, the company opened its centres in 35 locations along with purchase of land in Kolkata and Ahmedabad for newer sorting facilities. Continuing with its focus on automation after having fully automated its Gurugram facility, the company now plans to replicate the same in Pune. While it aims to build newer facilities on self-owned land parcels, it has followed an asset light model by using leased vehicles for logistics so as to enable it to adjust as per evolving market conditions.

A debt-free balance sheet, targetted capital expenditure, a strong focus on the B2B segment that pays higher growth margins and a loyal customer base are expected to benefit the logistics major. Motilal Oswal sees an upside of 13 percent in TCI Express stock price with a target price of Rs 1,850. The brokerage firm recommends buy.

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