Motilal Oswal's research report on Transport Corporation of India
We released our Logistics thematic report recently (Report link), wherein we stressed upon the Logistics sector moving towards formalization. We noted that this would provide strong growth opportunities for some of the established players, such as Transport Corporation (TCI). The share price of TCI has been up ~45% since our initiation, and we believe there is more steam left. The unique multimodal capabilities of TCI would drive consistent growth in volumes and earnings across segments over the next few years. With the easing of fuel prices (on account of tax cuts), margins are expected to remain at elevated levels. TCI has a well-blended portfolio, with a presence across a) the high-volume Freight segment, b) value-added segments such as Integrated Supply Chain Solutions, and c) niche high-margins segments such as Seaways.
Outlook
We expect TCI to clock a revenue/EBITDA/PAT CAGR of ~17%/25%/33% over FY21-24. We reiterate our Buy rating, with revised TP of INR790/share (16x FY24E EPS).
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