Buy The Stock Of This Logistics Player For Long-Term, Says Motilal Oswal

Upside target of Rs 390 on the stock

TCI is India’s leading integrated multimodal logistics and supply chain solutions provider. The company has infrastructure comprising an extensive network of 1400+ company owned offices, 12 million sq. ft. of warehousing space, a strong team of 6000+ trained employees and a strong foundation.

“The unique multimodal capabilities of TCI would drive consistent growth in volumes and earnings across segments over the next few years. With the easing of fuel prices (on account of tax cuts), margins are expected to remain at elevated levels,” Motilal Oswal Financial Services has said in its report.

TCI: A strong player with a solid portfolio

TCI has a well-blended portfolio, with a presence across the high-volume freight segment and value-added segments such as Integrated Supply Chain Solutions. The company also has niche high-margins segments such as Seaways.

Travel corporation of India is among the very few players that provide end-to-end logistic solutions with multimodal capabilities across road freight, rail, and coastal shipping.

“We expect Travel Corporation of India to clock a revenue/EBITDA/PAT CAGR of 17%/25%/33% over FY21-24. We reiterate our Buy rating, with revised target price of Rs 790 per share (16x FY24E EPS),” the brokerage has said.

Valuation and view on the TCI stock

Motilal Oswal Financials expects the growth momentum to continue with the pickup in economic activity and the normalization of transportation activity. The government reforms leading to formalization and market share gains for organized players such as TCI would help, the brokerage has noted.

“We expect TCI to clock a revenue/EBITDA/PAT CAGR of 17%/25%/33% over FY21-24E. The stock trades at 14x FY24 EPS. We maintain our Buy rating, with revised target price of Rs 790 per share (16x FY24E Earnings Per Share),” the brokerage has said.

The shares of Travel Corporation of India were last seen trading at Rs 708.50 on the NSE.