TCI Express Ltd. share price target

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...

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. EBITDA margin for FY19 improved 140 bps to 11.6% owing to higher capacity utilisation and operational efficiency. Overall, the company has guided for | 400 crore capex spend in five years, which would be utilised to expand its reach in Tier 2, 3 cities (hub & spoke model - reach 1000 offices count), open newer sorting centres (currently 28...

India's US$ 160bn logistics industry is amidst a much-needed transformation led by (1) structural reforms (GST, e-way bill) and the government's infrastructure thrust (DFC, Sagarmala), (2) the emergence of new-age, service-oriented businesses versus asset-heavy models, and (3) growing formalisation of the sector, propelling organised players to the fore. We prefer the emerging 3PL and express segments for long-term value creation. Among stocks, MLL, FSCSL, and TCIEXP...

EBITDA margins increased 135 bps to 11% mainly due to lower than estimated operating expense to sales ratio (74.1% vs. 75.2% in Q2FY18). Robust revenue growth coupled with margin expansion resulted in absolute EBITDA growth of 38% YoY to | 27 crore Reported PAT grew 25% YoY to | 16 crore, in line with I-direct...

ICICI Securities Ltd | Retail Equity Research Revenues grew 23% YoY to | 249 crore (I-direct estimate: | 233 crore) Decline in operating expenses to sales ratio to the extent of 256 bps mainly led to resultant EBITDA margins expansion by 220 bps YoY to 11.4% (I-direct estimate: 10.5%). Robust revenue growth coupled with margin expansion resulted in absolute EBITDA growth of 53% YoY to | 28 crore (I-direct estimate: | 25 crore Reported PAT grew 50% YoY to | 18 crore (I-direct estimate: | 16...