Introduction:Fundamental Analysis of TCI Express Ltd – A Growing Force in India’s Logistics Industry
TCI Express Ltd has emerged as a prominent player in the express cargo logistics market, known for its reliable, time-bound distribution services across India. With a legacy built on innovation and an asset-light business model, TCI Express serves a wide variety of sectors including pharmaceuticals, automotive, textiles, and electronics. As of now, the stock is trading at ₹972, with a PE ratio of 33 and a market cap of ₹3,732 crores, positioning it as a promising small cap with the potential to grow further in the coming years.
With its widespread reach, state-of-the-art automated sorting centers, and a strong B2B clientele, TCI Express offers a unique investment opportunity in the logistics sector, where demand for timely delivery solutions is on the rise. This blog will provide a detailed fundamental analysis of TCI Express Ltd, including financial performance, growth drivers, and future projections, and conclude with short- and long-term stock targets.
Table of Contents
A Quick Overview of TCI Express Ltd
TCI Express Ltd specializes in express cargo logistics and provides a range of services including Surface Express, Domestic and International Air Express, E-Commerce, Pharma Cold Chain, and Rail Express. Here are some highlights of the company:
- Capacity Utilization: Achieved 84% in FY24, reflecting efficient use of its infrastructure.
- Network: Covers over 95% of India’s pin codes with 28 sorting centers, 500 express routes, 2,500 feeder routes, and over 60,000 delivery points.
- Automation: Full automation at its Pune sorting center has led to a 40% reduction in turnaround time.
- Clientele: Strong focus on B2B (97%) customers across various sectors.
- Asset-Light Model: Operates without owning its fleet, reducing fixed costs and increasing flexibility.
- Growth Plans: Capex of ₹500 crore planned for FY23-FY28, with substantial investment in automation, IT infrastructure, and network expansion.
Financial Analysis: A Look at TCI Express’ Performance and Growth Potential
First take a glance at the balance sheet dash board of the company and lets understand step-by step
Sales, Net Profit & Operating Profit
- Sales: The company’s sales have shown consistent growth over the years. In March 2024, sales reached ₹1,254 crores, with a projected increase to ₹1,403.87 crores by March 2025.
- Operating Profit: From March 2018 to 2024, operating profit rose from ₹91 crores to ₹187 crores, with further growth expected to ₹238.26 crores in 2025.
- Net Profit: Net profit has also demonstrated steady growth, rising from ₹58 crores in March 2018 to ₹132 crores in March 2024, and projected at ₹147.78 crores for March 2025.
This upward trend in revenue and profits highlights TCI Express’ successful growth strategy, driven by efficient operations and increased demand for express logistics services.
Operating Profit Margin (OPM%)
Operating Profit Margin has been steady at around 16% from 2020 to 2023. However, in March 2024, OPM dipped slightly to 15%. The company is expected to achieve a slight increase in OPM to 16.97% by March 2025, demonstrating strong cost management and operational efficiency.
Earnings Per Share (EPS)
EPS has consistently grown, increasing from ₹15.25 in March 2018 to ₹36.35 in March 2024, with a projected EPS of ₹38.46 by March 2025. This steady rise in EPS reflects TCI Express’ ability to generate higher returns per share, making it attractive for investors seeking long-term growth.
Return on Equity (ROE)
TCI Express has maintained a robust ROE, peaking at 22.82% in March 2020 and stabilizing at around 18% in recent years. This high ROE, projected at 18.90% for March 2025, shows that the company effectively utilizes shareholder funds to generate profits.
Asset Distribution
The company’s assets are distributed as follows:
- Fixed Assets: ₹101 crores
- Investments: ₹1,310 crores
- Other Assets: ₹336 crores
- Capital Work in Progress (CWIP): ₹3 crores
The significant investment in investments and fixed assets supports TCI Express’ asset-light strategy, which enables it to expand operations without large capital expenses.
Liability Distribution
TCI Express has a manageable debt structure:
- Reserves: ₹859 crores
- Other Liabilities: ₹791 crores
- Equity Capital: ₹89 crores
- Borrowings: ₹10 crores
Low borrowings and high reserves indicate a strong balance sheet, providing the company with flexibility for future expansion and investment.
Growth Prospects and Targets
With consistent revenue growth, high capacity utilization, and an asset-light model, TCI Express Ltd shows strong potential for future expansion. The logistics industry in India is expected to see increased demand, and TCI Express, with its established network and advanced technology, is well-positioned to capture a significant share.
- Short-Term Target (3 months): ₹1,050, with a stop-loss at ₹910.
- Long-Term Target (1 year): ₹1,200, with a stop-loss at ₹880.
FAQ
What services does TCI Express offer?
Why is TCI Express considered a promising small-cap stock?
How does TCI Express’ asset-light model benefit the company?
What are the company’s future growth plans?
What is TCI Express’ expected EPS growth?
How does automation impact TCI Express’ operations?
What is the expected long-term target for TCI Express?
Conclusion
TCI Express Ltd has established itself as a strong player in the logistics industry, leveraging an asset-light model, advanced automation, and a comprehensive network to meet India’s growing demand for express cargo services. Its consistent financial performance, strategic expansion plans, and focus on B2B clientele position it as a promising small-cap stock. Investors looking for exposure in the logistics sector may find TCI Express a viable option, with both short-term and long-term growth potential.
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