New Delhi

Better festival stocking and a healthy pick up in warehousing as well as quick commerce aided Transport Corporation of India (TCI) in reporting resilient numbers during Q2 FY25 despite stalling economic conditions due to monsoons, geopolitical uncertainties and slow private consumption.

The leading integrated supply chain and logistics solutions provider reported a healthy over 22 per cent y-o-y growth in its consolidated profit after tax (PAT) at ₹107 crore in Q2 FY25. Consolidated revenues rose almost 13 per cent y-o-y to ₹1,131 crore.

“Overall, the quarter went off quite well. We had better stocking in the festival season compared to previous. I would attribute about 5-10 per cent increase in stocking that happened because of the ensuing festival season. However, areas in supply chain business like quick commerce or warehousing have picked up quite rapidly,” TCI Managing Director Vineet Agarwal told businessline.

Logistics sector

On automobiles, he said that two-wheelers performed better than four-wheelers. The sea (logistics) business has been able to increase prices on the domestic leg and with fuel prices being stable, TCI had a positive impact on both top line and bottom line, he added.

Agarwal, however, pointed out that MSME growth is still “quite weak” and is having an impact on its freight LDL business.

During Q2 FY25, TCL witnessed a strong traction in its warehousing and 3PL green multimodal solutions business from sectors such as industrials, electrical equipment, chemicals, quick commerce and consumer electronics, etc.

Geopolitics

On geopolitical tensions impacting business, Agarwal explained that geopolitics is a larger subject where visibility is much lesser as one does not know what will and can happen. Escalation in wars in the Middle East will have a direct impact on fuel prices.

“However, the indication that there is a clear cut some level of slowdown evident because interest rates have started to be cut globally, whether it is Europe or the US, which is an indication that there is some slowing down. There is going to be perhaps some recession in some parts of the world, which is essentially now starting to put pressure on freight rates,” he added.

There is some softening that has happened on container freight rates and that is directly correlated with export numbers, or, the possibility that export will start getting weaker.

“Clearly, the challenge for India would always be on how do we get a higher value share versus volume share? How do we deliver more of that high quality product? So if there is, like phones that are getting made or electronic equipment that is getting made and so on, I think those are things that will certainly help in terms of value addition, value accretive exports,” Agarwal opined.

Going ahead, he said TCI remains optimistic on growth in the coming quarters due to increased public infrastructure spending renewing thrust on rail, waterways and multimodal-cargo-park projects clubbed with recovering private consumption.

“By investing in technology, automation, and enhancing our rail and coastal multimodal service offerings to expand our network, we are continuously strengthening our capabilities to remain as the leaders in logistics,” he noted.

Related Topics