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Trading Bells
TCI Express (Buy)
CMP: ₹775
Target price: ₹1,100
TCI Express is a prominent player in the express logistics industry providing Door-to-Door express Distribution services. Headquartered in Gurugram (NCR), India, its operations are pan-India, covering the length and breadth of the country.
Established as a multi-specialist express cargo division of Transport Corporation of India in 1997, TCI Express was demerged as a separate entity in 2016. It possesses deep industry expertise, logistics and solutions design capabilities and credentials across many sectors, which enable us to deliver complex and customised end-to-end supply chain solutions. It employs nearly 3,000 permanent and temporary employees across India.
It includes services such as Surface express, Domestic Air express, International Air express, Reverse express and E-commerce.
Performance highlights: Company has witnessed around 25 per cent CAGR profit growth in last three years. It delivered 15.6 per cent top line growth whereas 24.7 per cent bottom-line growth in FY19. Q3 of FY19 was subdued but y-o-y it witnessed decent growth.
Valuation: TCI Express has been witnessing robust earnings growth, primarily due to the benefits of reduced delivery time, reduced inventory cost, minimisation of loss of sale opportunities. As it has consistent track record of more than 30 per cent ROE, it is our top pick in logistic sector with upside target of ₹1,100 in the next one year.
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