In Q1FY17, TCI got approval to de-merge its XPS division into a wholly-owned subsidiary following which consolidated numbers were unavailable. Revenues for Q1FY17 (excluding XPS) grew 8% YoY to | 427 crore. Traction was witnessed across all segments. Growth was mainly driven by its supply chain segment, which grew 12% YoY to | 172 crore. However, freight division and shipping grew 5.6% YoY and 9%, respectively. Post de-merger, the freight business would contribute ~51% of total revenues; supply chain and shipping would form the remaining 40% and 9%, respectively.

Valuation: Given the share swap ratio, the FY18E EPS of XPS division is expected at | 14. Assigning a multiple of 30x to same we arrive at a targeted listing price of | 400-450/share. The value unlocking to the current investors is ~11%, following which they maintain BUY rating.