Buy Transport Corporation of India; target of Rs 880: Motilal Oswal

Motilal Oswal is bullish on Transport Corporation of India recommended buy rating on the stock with a target price of Rs 880 in its research report dated August 01, 2023.

Broker Research

August 03, 2023 / 23:06 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on Transport Corporation of India

Transport Corporation of India (TRPC) reported revenue of ~INR9.5b in 1QFY24, up 9% YoY (5% below our estimate). The Freight and Supply Chain divisions grew 3% and 20% YoY, respectively. The high-margin Seaways segment declined ~18% YoY during the quarter. EBITDA margin contracted 90bp YoY to 10.6% (our est. 10.8%). The Seaways division’s EBIT margin rose 150bp QoQ to 29.2% in 1QFY24 from 27.7% in 4QFY23. Further, Supply Chain division’s EBIT margin improved 80bp YoY. APAT grew 6% YoY to INR823m (5% above estimate). Lower-than-expected tax rate supported PAT during the quarter. While the Freight Services business is expected to benefit from the shift to organized sectors from the unorganized ones, the Supply Chain division is likely to continue its growth momentum driven by the automotive sector. TRPC's highest margin segment, Seaways, is projected to remain flattish in FY24 as the new ship is yet to be added. However, the company is confident of adding the ship in 2HFY24.

Outlook

We have raised our EPS estimate by 4% for FY25 to incorporate the improved outlook across segments. We maintain our BUY rating with a revised TP of INR880 (based on a P/E multiple of 15x FY25E EPS).

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