Transport Corporation of India (TCI) has developed strong capability in multimodal logistics through its presence in major transport modes, highlighted brokerage Motilal Oswal. The company has a well-diversified service offerings ranging from Road Freight, Integrated Supply Chain Solutions, Sea Freight to Rail Freight for a joint venture with Concor.
“These efficiencies will be a key enabler for continued growth in volumes and earnings for TCI over the next few years. With improvement in the share of sewage segment, margins are expected to remain elevated,” the note said.
Motilal Oswal has a buy rating on multibagger stock with a target price of 880 per share, indicating a potential increase of over 38% from current levels. TCI shares are up more than 145% in a year, while the stock is down about 12% so far in 2022 (year-to-date or YTD).
The brokerage expects the growth momentum to continue, with economic activity picking up, normalization in transport activity, and government reforms to formalize and increase market share for organized players like TCI.
Road freight will benefit from the impact of reforms such as GST and e-way bill, which will result in shifting of market share towards organized players, and improve road connectivity, thereby reducing turnaround time. Besides, the supply chain segment is expected to grow well as issues relating to the auto sector stabilize. Growing penetration of supply chain offerings in other sectors will help the growth, the brokerage highlighted.
Motilal Oswal’s note said, “The sewage segment is expected to grow well with higher volumes and better realization. The purchase of a new vessel in FY23 will help boost the share of the high-margin sewage segment. Which will increase the income.”
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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