TCI Express sees SME-led volume recovery as e-commerce and multimodal logistics scale

Investment View and Valuation

Motilal Oswal Financial Services Ltd. (MOFSL), in its August 6, 2026 result update on TCI Express (TCIE), described 1QFY27 performance as broadly in line and retained its Neutral rating. The broker revised its target price to Rs 570, based on 20 times FY28E EPS, versus a CMP of Rs 580.

MOFSL broadly maintained its FY27 and FY28 estimates, with only FY27E PAT and EPS reduced by 1.2 per cent. The broker expects TCIE to deliver FY26-FY28 CAGR of 6 per cent in volumes, 7 per cent in revenue and 11 per cent in EBITDA.

1QFY27 Financial Performance

TCI Express reported revenue of Rs 3,120 million in 1QFY27, up 9 per cent year on year and broadly in line with MOFSL's estimate. EBITDA was Rs 336 million, up 12 per cent year on year and 5 per cent above the broker's estimate of Rs 319 million. EBITDA margin was 10.8 per cent, compared with MOFSL's estimate of 10.4 per cent.

Adjusted PAT rose about 7 per cent year on year to Rs 224 million, against the broker's estimate of Rs 218 million. Volumes increased 7 per cent year on year to 0.25 million tonnes, while realisation rose 1.4 per cent year on year to Rs 12,478 per tonne. Capacity utilisation remained steady at 84 per cent.

Broad-Based Segment Growth

Management attributed the steady quarter to broad-based segment growth. Surface Express, the largest revenue contributor, grew about 9 per cent year on year, supported by higher volumes from existing customers, new accounts and demand from automotive, SME and pharma customers.

• Rail Express: Continued to scale through corridor expansion and rail-network operations, supported by 10 new branches that improved pickup density and multimodal connectivity.
• Domestic Air Express: Grew 29 per cent year on year through customer additions, enterprise-account expansion, direct airport delivery coverage and automation.
• International Air Express: Grew 27 per cent year on year, driven by new customers, customer win-backs and global-carrier partnerships, although the West Asia crisis affected the segment in 4QFY26.
• E-commerce Express: Grew 63 per cent year on year, helped by platform and direct-to-consumer shipments, but represented only about 2 to 3 per cent of total revenue.

FY27 Growth Outlook and Management Guidance

For FY27, management guided for volume growth of 11 to 12 per cent and revenue growth of 13 to 15 per cent year on year. Management expects EBITDA margin to improve by 100 to 150 basis points, supported by cost optimisation, automation benefits and pricing.

TCIE implemented its annual general price increase and a fuel-surcharge revision in June 2026 to counter higher fuel costs. Management expects the full benefit from these actions to be reflected from 2QFY27.

Management aims to increase e-commerce's share to about 5 per cent and multimodal revenue share from 17 to 18 per cent currently to 20 to 22 per cent by 2030. TCIE maintains low customer concentration, balances SMEs and large institutional clients, and prioritises profitable growth over pure volume growth. Automobile, pharma and textile together contribute about 55 per cent of revenue.

Capex and Operating Priorities

TCIE's revised FY23-FY27 capex plan is Rs 4,000 million, of which Rs 2,900 million had been spent. The company expects capex of no more than Rs 1,100 million through FY27, below the initially planned Rs 5,000 million.

The planned spending is intended for automated sorting centres in Kolkata and Ahmedabad, branch expansion and IT infrastructure. The company's priorities include automation-led efficiency gains, multimodal expansion, e-commerce growth and profitable customer acquisition.

MOFSL Financial Forecasts

Key Drivers and Risks to the Thesis

MOFSL's thesis depends on further SME-demand recovery, greater multimodal and e-commerce contribution, successful pricing actions and automation-led efficiency gains. The outlook also depends on the company's ability to deliver the guided volume and revenue growth while improving margins through cost optimisation, automation and pricing.