TCI Express Ltd. share price target

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).

TCI Express’ (TCIE) Q3FY23 performance undershot our estimates by 13% primarily on higher cost though revenue was in line. Key points: 1) Weaker-than-expected festive season led to lower utilisation levels; 2) EBITDA margin was down 196bps QoQ to 14.7%- at a similar level as Q1FY23 owing to higher other expenses.