February 28, 2024

Motilal Oswal’s research report on Transport Corporation of India

Transport Corporation of India (TRPC)’s revenue is likely to grow steadily in the medium term backed by: 1) the higher share of LTL in the freight division (36% in 1HFY24 vs. 33% in FY22), 2) steady automotive demand, which should support supply chain division, and 3) accruing benefits from the traction in multi-modal logistics. The company has an extensive fleet of more than 10,000 trucks, six cargo ships, and 14m sq. ft. of warehouse space. TRPC placed an order with a Japanese shipyard to buy two new ships of ~7,300MT each for a consideration of USD34m (INR2.7b). These vessels are slated for delivery on or before Jun’26. TRPC currently has six ships with a total capacity of 77,957MT.

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Outlook

TRPC’s established infrastructure, long-standing customer relationships, and an experienced management team are anticipated to aid its position as a preferred 3PL partner. We expect TRPC to deliver a revenue/EBITDA/PAT CAGR of 14%/16%/17% over FY23-FY26. We reiterate our BUY rating on the stock with a TP of INR990, based on 15x FY26E EPS.

For all recommendations report, click here

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Transport Corporation of India – 16012024 – moti