TCI Express Ltd. share price forecast

The Express Logistics industry is expected to clock robust growth, with: a) growing demand for faster delivery, b) improved road connectivity, reducing the turnaround time, c) growth in e-commerce, and d) reforms like GST....

What should investors do? TCI has been consistently delivering strong profitable growth (within a competitive environment), helped by its infrastructure of owned IT enabled branches (provides better execution and customer feedback loop)....

PAT grew 45% to | 34 crore due to strong operating performance What should investors do? Building pan-India owned branches and sorting centres in every major city supported by IT enabled transportation infrastructure is...

Robust volume growth in Q2 a reflection of improving macros. Network expansion and new sorting centre to sustain growth

Profitability continues to soar to newer heights TCI Express continued to post a recovery in profitability in FY21 (EBITDA margin expansion by 410 bps), in-spite of lower operating leverage (volumes down 17% in FY21), as the management employed cost control measures, realisation hikes, passage of crude oil price rise to most of the customers and continued to pick only profitable sales. The management expects the expansion in EBITDA margins to continue from here on (100 bps each year), aided mainly by volume growth, as it expects the SME sector to bounce...

Logistics: Pandemic redefining industry landscape BUY MLL, TCIEXP, VRLL. April MPC Minutes: MPC steadfast on growth

Our logistics coverage has rebounded from the black swan Covid event of H1FY21.

TCI Express (TCIEL) continued its strong QoQ momentum in topline (up 23%) and bottomline (up 43%) while it lagged in YoY revenue comparable (flat YoY). However, due to significant margin expansion, TCI Express posted healthy growth (up 32%) on the YoY profitability front. MoM the performance remained mixed as recovery during the month of October (led by festive season) saw contraction of core industries in November. EBITDA margins expanded 449 bps YoY (198 bps YoY) to 17.3% mainly due to cost control measures employed by the company, which is evident in lower...

An effective asset-light model, price hikes and efficiency gains enabled TCI Express (TCIEXP) to deliver a strong EBITDA margin beat (15.3% vs. 11.5% est.), negating a 21% YoY topline fall (est. 15%).

Business activity, which gained momentum from May, saw phase wise pickup in manufacturing & related supply chain activities. With further easing of restrictions, the momentum stayed on the positive trajectory MoM. As per management, volumes have normalised in September (also confirmed by EWay bill generation). The management expects economic growth to grow in the positive territory in H2FY21 (channel filling amid festivities). Revival of SME sector remains key to TCI Express' fortunes. It is expected to tide over the current volatility by continued automation, enhancing technological capabilities and reducing field footprints. We expect the company to report a revival in revenue growth from FY22 driven by new branch additions &...

Lead indicators bounce back strongly

Two new owned sorting centres are also expected to start by Q3 FY21whichwouldhelpreducerentalcosts. WeexpectutilizationtoreachPreCOVIDlevelsbystartofH2FY21. Webelievesignificantpartofrevenuelosswouldbecoveredupin...

Increased digitisation, innovation to drive growth ahead Revenue growth in FY20 was flat YoY (slower than usual FY17-19 CAGR of 17%) owing to continuing crisis. FY21 has begun with a completely new landscape for the logistics business. While April was largely spent in addressing on-ground challenges (hiccups in interstate movement, greater micro-management of trucks), May has largely seen phase wise pickup in manufacturing & related supply chain activities. The management expects economic growth to normalise post H1FY21. Revival of SME sector remains...

Already reeling under a domestic consumption slowdown, the Indian logistics industry has now taken a severe blow from Covid-19-led trade disruptions.

Our recent interaction with the TCI Express (TCIEXP) management indicates severe pressure on near-term operational performance stemming from the Covid-19 outbreak.

TCI Express (TCIEXP) reported an in-line operating performance in Q3FY20 as solid gross margin expansion (+310bps YoY) compensated for muted topline growth (+2%).

Revenue growth in H1FY20 has been slower than usual at ~6% (FY17-19 CAGR of 17%) owing to slower economic growth leading to lower volumes. The company expects volume growth to pick up in H2FY20 driven by better traction from large customers and continued addition of new customers from the SME segment. We expect the company to report revenue growth of 8% for FY20 while the EBITDA margin is expected to improve due to...

Strong client addition from SME to aid revenue growth In spite of competition from rivals like Blue Dart, Gati and Rivigo, TCI Express has been consistently clocking double digit growth (15%+). Revenue growth has been driven by volume growth and increased business from addition of new customers. Q1FY20 appears to be impacted by the general slowdown in manufacturing activity and disruptions due to general elections. However, we expect the company to report revenue growth of 15% in FY20 driven by new client additions, particularly from the SME...