Neutral TCI Express; target of Rs 530: Motilal Oswal

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • TCI Express's surface express business is expected to drive growth, with a steady increase in yields and expansion of network.
  • The company's domestic air express business is also expected to contribute to growth, driven by customer additions and expansion of enterprise accounts.
  • TCI Express has implemented price hikes to offset higher fuel costs, and management expects this pricing momentum to continue in 3Q and 4QFY27.
  • The company is focused on cost optimization, automation, and expansion of its multimodal logistics segment, which is expected to contribute 20-22% of total revenue by 2030.

Thesis Validation Checklist

  • Watch for volume growth of 11-12% in 2HFY27, driven by a recovery in demand from the SME segment and expansion of the multimodal logistics segment.
  • Monitor the company's ability to maintain its pricing power and pass on higher fuel costs to customers.
  • Track the progress of the company's cost optimization and automation initiatives, and their impact on EBITDA margin.
  • Keep an eye on the growth of the e-commerce express business, which is expected to be a key driver of revenue growth.