Q3FY21 Result Update - TCI Express - ICICI Direct

TCI Express (TCIEL) continued its strong QoQ momentum in topline (up 23%) and bottomline (up 43%) while it lagged in YoY revenue comparable (flat YoY). However, due to significant margin expansion, TCI Express posted healthy growth (up 32%) on the YoY profitability front. MoM the performance remained mixed as recovery during the month of October (led by festive season) saw contraction of core industries in November. EBITDA margins expanded 449 bps YoY (198 bps YoY) to 17.3% mainly due to cost control measures employed by the company, which is evident in lower employee, other expenses and higher gross margins. Subsequently, absolute EBITDA grew 32% YoY (39% QoQ) to Rs. 45 crore. Buoyed by the strong operating performance, PAT grew 32% to Rs. 34 crore (43% QoQ).

Valuation & Outlook

In spite of the hiccups in the near term (strong B2C performance positively impacted other players), the company's focus on building its moat in the B2B segment, bodes well for continued profitable growth in the longer run. TCI Express has a diversified customer base across industry verticals. With the expansion of owned branches along Metro and tier 1 cities, this helps TCI Express in having control over user experience and providing value added services to clients. We value TCIEL at 33x P/E with a target price of Rs. 1150 (earlier price Rs. 900). We maintain our BUY recommendation.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_TCIExpress_Q3FY21.pdf

Shares of TCI Express Ltd was last trading in BSE at Rs.960.5 as compared to the previous close of Rs. 980.9. The total number of shares traded during the day was 4259 in over 557 trades.

The stock hit an intraday high of Rs. 994.75 and intraday low of 959.5. The net turnover during the day was Rs. 4164412.

Source : Equity Bulls

Keywords