Motilal Oswal's research report on Transport Corporation of India
Transport Corporation of India (TRPC) posted 4QFY23 revenue of ~INR9.8b, up 9% YoY (in line). The Freight and Supply Chain divisions grew 5% and 26%, respectively, YoY. The high-margin Seaways segment declined 5% YoY. EBITDA margin contracted 230bp YoY to 11.0% (our est. 12.2%). Growth in Seaways was hit by the absence of high-margin return load from Myanmar and dry docking of certain ships in the quarter that hurt utilization levels. EBITDA declined 9.4% YoY to INR1.1b and APAT remained flat YoY to INR849m (in line) in 4QFY23. APAT was supported by high other income. For FY23, revenue stood at INR37.8b (+16.1% YoY), EBITDA margin was at 11.2% (v/s 12.6% in FY22) and APAT stood at INR3.2b (+10.7% YoY). The quarter has been a mixed bag with decent performance by Supply Chain segment offset by the subdued performance in Seaways. TRPC expects to acquire a new ship in FY24, which should help volumes in Seaways.
Outlook
We have marginally reduced our EPS for FY24E/FY25E by 2%/4% to factor in lower growth in high-margin Seaways segment during FY24. Reiterate BUY with a revised TP of INR760 based on a P/E multiple of 14x FY25E EPS.
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