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Dolat Capital Report
Transport Corporation of India Ltd. displayed a decent set of numbers in Q2 FY24, revenue grew 4.6% QoQ to Rs. 9.9 billion led by strong growth in seaways business, partially offset by muted growth from freight division. Ebitda remained flat QoQ with 50 basis points contraction in margin to 10.1 % due to fall in margin of seaways division.
Management sounded strong growth in supply chain business while expect Seaways business to be flattish in FY24 due to delay in purchase of ship. H2 FY24 would be better than H1.
We see Transport Corporation of India as a long-term play, backed by:
increasing demand for integrated logistics service providers,
Strong presence in the high growth third party logistics segment and
improving share in the less-than-truckload business in the road freight division.
At current market price, stock is trading at 16.5/14.6 times at FY24E/25E earning per share. We value the stock Rs 1046 (16 times FY26E earning per share). Maintain 'Buy'.
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