TCI Express Ltd. share price target

TCI Express’ (TCIE) Q3FY25 EBITDA of INR 289mn was 22.9% below our estimates. Volume declined 3.2% YoY due to subdued demand. EBITDA margin slipped to 9.8% (lowest since Q2FY21) on account of a volume dip, higher operating costs and unabsorbed fixed cost.

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.

We retain a Buy with a revised PT of Rs. 1,250, factoring in a downward revision of estimates and expecting a revival in growth from FY2026.

TCI Express (TCIE) Q1FY25 EBITDA was significantly below our/consensus estimates, mainly on account of underutilised capacity, higher operating cost and unabsorbed fixed cost.

We retain a Buy on TCI Express with a revised PT of Rs. 1,350, factoring in a downward revision of
estimates and expecting a revival in growth from H2FY2025.

TCI Express (TCIE)’s 1QFY25 revenue decreased 4% YoY to ~INR2.9b (7% below our estimate), while volumes declined 2% YoY. Volumes were temporarily hit by the general elections.

TCI Express (TCIE)’s Q2FY24 EBITDA was in line with our estimates but missed street’s estimates by 5.2%. Key points: 1) EBITDA margin expanded by 55bps QoQ due to improved utilisation levels, price hike and additional contribution from non-surface business. 2) Volume was up a mere 2% YoY/ 5% QoQ owing to lower traction in lifestyle and consumer durables segments. 3) 12 new branches were added in H1FY24.

TCI Express’ (TCIE) Q1FY24 EBITDA performance missed our and street’s estimates by 3% and 12%, respectively. Key points: 1) EBITDA margin recovered by 50bps YoY due to a combination of sorting centre efficiencies, price hike and better fill factor; 2) volume was up 4.3% YoY despite a challenging macro environment; 3) revenue share of other services rose to 17% (Q1FY23: 15%); and 4) focus remains on pursuing profitability than just growth.

TCI Express’ (TCIE) Q4FY23 EBITDA performance surpassed our estimates by ~12.7% primarily on higher volumes and better capacity utilisation leading to higher margins. Key points: 1) Truck utilisation improved to ~85% in Q4FY23 vs average of 84.25% in FY23; 2) EBITDA margin expanded by 190bps QoQ to 16.6% (vs 16.8% in Q4FY22 and 14.7% in Q3FY23).