Buy TCI Express, target price Rs 2200 : ICICI Securities

ICICI Securities has buy call on TCI Express with a target price of Rs 2200.The current market price of TCI Express is Rs 1800.

TCI Express, incorporated in the year 2008, is a Mid Cap company (having a market cap of Rs 6921.62 Crore) operating in Logistics sector.

TCI Express key Products/Revenue Segments include Freight & Demurrage for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company has reported a Standalone Total Income of Rs 312.17 Crore, up 6.77 % from last quarter Total Income of Rs 292.37 Crore and up 13.19 % from last year same quarter Total Income of Rs 275.80 Crore. Company has reported net profit after tax of Rs 37.79 Crore in latest quarter.

The company’s top management includes Mr.D P Agarwal, Mr.Chander Agarwal, Mr.Vineet Agarwal, Mr.Phool Chand Sharma, Mr.Murali Krishna Chevuturi, Mr.Ashok Kumar Ladha, Mrs.Taruna Singhi, Mr.Prashant Jain. Company has R S Agarwala & Co. as its auditors. As on 30-06-2022, the company has a total of 4 Crore shares outstanding.

Investment Rationale
In the brokerage's view, TCI Express stands at a vantage point with progressive automation of service centres ushering in cost efficiencies and opening of new (own) branches expanding the reach. As a result, the brokerage expects EBITDA margin to expand to 17.5% inFY24 (FY22: 16.2%) and RoE to sustain between 23-24%. Taking cognizance of higher margins, ICICI Securities has raised valuation multiple to 42x (earlier 40x). TCIE remains the brokerage's preferred pick in the express logistics segment.

Promoter/FII Holdings
Promoters held 66.69 per cent stake in the company as of 30-Jun-2022, while FIIs owned 1.89 per cent, DIIs 8.8 per cent.