Transport Corporation of India (TCI) will incur a capital expenditure of around ₹1,000 crore over the next four years as the multi-modal logistics major eyes to expand scale focusing on shipping, warehouses & land as well as on acquiring new vehicles (trucks) and expanding its vehicle fleet.
“In the next four years, we look at about ₹1,000 crore in capex. So, in that about ₹400 crore will be on ships, approximately ₹300 crore would be in warehouse & land business, approximately ₹150 crore in trucks and containers and approximately ₹150 crore on other assets such as warehousing equipment, other capex that you require on a regular basis,” TCI Managing Director Vineet Agarwal told businessline.
Asked about the focus on shipping business, he pointed out that coastal shipping in India today is only about 6-7 per cent of the total freight that gets moved. It has a very high potential, considering that countries such as China are probably close to 20-25 per cent. It not only lowers the cost of transportation, but it is also green logistics as it helps reduce carbon emissions. It is a sector that requires a lot of push.
Multi modal logistics
To bolster multimodal capabilities, TCI has placed orders for building of two 7,300 tonnes each of dead weight capacity cellular container vessels for a total contract price of $38.80 million (around ₹325 crore). The ships are expected to be delivered by end 2026.
“We have been in this business for many decades. We’ve scaled up the business in the last 5-7 years. We have about 78,000 dead weight tonnes, 8,500-9,000 TEUs. These ships are all second hand ships. Our capacity expansion is essentially based on buying second hand ships. However, for the first time, we’ve gone ahead and ordered two new ships,” he added.
Agarwal said that the company will “continuously keep looking” to buy more second hand chips. The capex in the business will be around Rs 400-500 crore in the next four years.
On the rail multi-modal logistics push, he said “We got into the rail business almost a decade ago. We focus firmly on container businesses because the multi-modal aspect gets very easy with it. You can move it from road to rail to sea and vice versa. It is a JV with Concor.”
“In the last five, seven years. We’ve also accelerated movement of automobiles also by trains and these are using some of our own AFTO trains, which are specially built for auto carriers. Second is that railways also have NMG wagons, which are available for lease. We have been doing a hub and spoke for many of our auto clients and in fact, we manage 60 yards across the country for our automotive clients,” he explained.
Almost 30 per cent of the cargo movement in TCI is happening through multi-modal logistics.
Robust quarterly performance
On a standalone basis, TCI reported a 26.3 per cent Y-o-Y growth in its profit after tax (PAT) at ₹105.2 crore during Q1 FY25. Its standalone revenue of ₹984.4 crore was higher by almost 11 per cent on an annual basis.
“We have delivered a robust performance in the first quarter of FY 2025. All our product segments serving various industry verticals have grown, especially coastal shipping, rail multimodal solutions, 3PL/ warehousing and cold chain logistics,” Agarwal noted.
TCI continues to innovate and develop sustainable solutions through investments in rail and coastal multimodal assets and networks. It is enabling customers to reduce GHG emissions by increasing the fleet of BS VI vehicles and adopting alternate fuels like electric, CNG and LNG, he added.
“Budget has laid out a clear roadmap for growth of the logistics sector as envisioned in the National Logistics Policy. TCI continues to invest in critical infrastructure like warehouses, yards and leverage big data from e-waybills and FASTag to estimate demand and enhance logistics efficiency for our customers,” Agarwal emphasised.