ICICI Securities Limited recently issued Buy Call on TCI Express Ltd, along with a new Target Price for the company. Now, let’s examine the research reports and explore their overviews.
TCI Express Ltd. is a renowned logistics company founded in 1996 by Mr. D.P. Agarwal. Headquartered in Gurugram, India, TCI Express has established itself as a leading player in the express distribution industry.
The company primarily focuses on serving the Indian market, offering its logistics solutions across the length and breadth of the country. With a strong network of over 800 branch offices and 9,000+ delivery points, TCI Express ensures reliable and efficient delivery of goods to both urban and remote areas.
First of all, let’s take a look at the current share price of TCI Express Ltd. To visualize these changes, we can refer to the TCI Express Ltd Share chart which displays the historical share prices, indicating the ups and downs over time.
ICICI Securities Limited’s Report Overview
TCI Express’ (TCIE) performance in Q4FY23 exceeded expectations with an EBITDA growth of approximately 12.7%. This achievement can be attributed to higher volumes and improved capacity utilization, leading to higher margins. Notable highlights include an increase in truck utilization to around 85% in Q4FY23 compared to an average of 84.25% in FY23. The EBITDA margin also expanded by 190 basis points quarter-on-quarter to reach 16.6% (compared to 16.8% in Q4FY22 and 14.7% in Q3FY23).
Despite a marginal decline in realization per tonne equivalent (te), which stood at Rs12,405 in Q4FY23, the EBITDA per te increased to Rs2,059. The company’s board has approved a final dividend of Rs2 per share, resulting in a total dividend of Rs8 per share.
Looking ahead, TCI Express aims to double its revenues to Rs17.5 billion to Rs18 billion between FY22 and FY25. The management has provided guidance for FY24, projecting a revenue growth of approximately 17-18% driven by a 15% volume increase, a 2% price hike, and an anticipated EBITDA margin of around 17.5%. Additionally, the company is focused on automating its sorting centers to enhance cost-efficiencies throughout the value chain.
Based on the revised valuations for FY25, the target price for TCI Express is now set at Rs1,775 (previously Rs2,000), considering a 34x FY25E EPS multiple. The decision to lower the multiple is due to a decline in RoCE/RoE profiles over the past 4-5 years and prevailing industry challenges. Nevertheless, a “BUY” recommendation is maintained.
ICICI Securities Limited Buy Call: TCI Express Ltd
TCI Express Ltd’ current market price is Rs 1,513. Recently, ICICI Securities Limited recently issued Buy Call on TCI Express Ltd with a new Target Price of Rs 1,775.
|Company||TCI Express Ltd|
|AUTHOR||ICICI Securities Limited|
|DATE||30 May 2023|
|Current Price||Rs 1,513|
Here’s a table summarizing the ownership structure of the company.
|Shareholding Pattern||Sep ’22||Dec ’22||Mar ’23|
|Mutual Funds and Others||8.5%||8.6%||8.5%|
|FIs and Banks||0.0%||0.0%||0.0%|
|Foreign Institutional Investors||2.0%||2.1%||2.4%|
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