Transport Corporation of India Limited — Q3 FY26 earnings call

Call held 5 Feb 2026

Management summary

TCI reported a moderate Q3 FY26, extending its streak of 22 consecutive quarters of Y-o-Y growth, driven by strong performance in supply chain solutions and joint ventures. While the freight business continues to face margin pressure, management anticipates a revival in the next two quarters. The company is investing significantly in multimodal infrastructure and new ships, which will lead to near-term ROCE compression and a projected stabilization of Seaways margins at a lower level post FY27.

Highlights

  • Achieved 22 consecutive quarters of Y-o-Y growth, demonstrating consistent performance.

  • Supply Chain Solutions segment grew robustly by 15% on the top line.

  • Joint ventures, including Concor, Cold Chain, and Transystem, reported strong growth rates of 20%+, 17%, and 12% respectively.

  • Multimodal strategy is effectively driving volumes, with 2133 rakes in 9 months and significant GHG emission reductions (140,000 tons of carbon saved).

  • Maintained a healthy cash balance of approximately ₹250 crores.

Concerns

  • Freight business continues to face challenges, with margins remaining flat and slightly lower, expected to persist for another one or two quarters.

  • ROCE is compressed due to ongoing investments in the business.

  • Seaways margins are expected to compress to around 30% post FY27 from the current 40-45% range, primarily due to new ship additions, increased competition, and higher fuel prices.

Key financials

4 periods

Headline

  • Cash Balance
    ₹250 Cr
  • Supply Chain Top Line Growth
    15%
  • Seaways EBIT Margin (Current)
    40%
  • Supply Chain EBITDA Margin
    9.5%

9M

  • Console Top Line Growth
    9%
  • Console Bottom Line Growth
    12%

FY24

  • Freight ROC
    20%

Post FY27

  • Seaways EBIT Margin
    30%

What they filed

Q1 FY27: revenue up 8.7%, net profit down 3.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue998 994 1,004 984 1,048 +5%1,065 +7%1,128 +12%1,070 +9%
EBITDA109 110 117 113 114 +5%121 +10%133 +14%124 +10%
Net profit82 118 90 124 88 +7%130 +10%102 +13%120 −3%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Freight Business
    — Margins20% ROCE (2023-24)27% ROCE (Year Before)
  • Supply Chain Solutions
    15% Top Line Growth— Margins
  • Seaways Business
    1,21,000 units Container Handling (9M)1,54,000 units Container Handling (Last Full Year)— Cars Handled
  • Joint Ventures - Concor
    20% Growth
  • Joint Ventures - Cold Chain
    17% Growth
  • Joint Ventures - Transystem
    12% Growth

Capital allocation

high confidence
  • Capex ₹350 Cr
    • Overall Capex for FY26 In progress ETA FY26 ₹266 Cr
    • New ships Planned ETA FY27 ₹200 Cr
    • Regular investments (warehouses, trucks, rakes) Planned ETA FY27
    Overall, in terms of Capex, the budget was about 450 crores. I think we've reached about 266 crores. We should get between 350 and 375 crores for this fiscal. And we're looking at a similar kind of budget for the next year also. ... That year, FY27, we don't have the exact numbers, but the ship is going to complete the two ships that we've ordered. They're going to come in. We will make the full payments for those ships. So, that itself will be about 200 odd crores. And apart from that, the regular investments in warehouses, trucks, rakes, etc. will continue. So, we expect the budget to be closer to 450-500 around the same range.
  • Liquidity Cash ₹250 Cr
    And the company, we have about 250 odd crores of cash.

Guidance & targets

Market Share

  • Coastal Shipping Share Market Share · in 20 years from now · High confidence 12%

    From 6% today

    There's also coastal shipping that has been specifically mentioned in the budget, which is essentially increasing the share from 06 to 12% in 20 years from now.

    — Mr. Vineet Agarwal

Profitability

  • Freight Business Challenges Duration Profitability · next 1-2 quarters · High confidence 1-2 quarters
    freight business has been going through some challenges, and the numbers are reflecting that we expect another one or two quarters more of these challenges and then things should start looking up.

    — Mr. Vineet Agarwal

  • Freight Business Margin Trend Profitability · next two quarters · High confidence better

    From flat and slightly lower today

    So, margins are flat and slightly lower, but the trends are looking to be better in the next two quarters.

    — Mr. Vineet Agarwal

  • Console Level Bottom Line Profitability · achievable · High confidence 15%
    and on the 15% odd on the bottom line at the console level should also be achievable.

    — Mr. Vineet Agarwal

Cost

  • Seaways Fuel Prices Cost · Q4 · High confidence slightly higher
    However, we are expecting fuel prices to be slightly higher in Q4.

    — Mr. Vineet Agarwal

Revenue

  • Seaways Top Line Revenue · Q4 · High confidence flat or slightly higher
    we see that top line should, as over the nine months has been flat, would continue to remain flat or slightly higher.

    — Mr. Vineet Agarwal

Margin

  • Seaways Margins Margin · Q4 · High confidence 40-45%
    Margins remain in this 40-45% range, of course, slightly better in the last quarter also.

    — Mr. Vineet Agarwal

  • Seaways Margins (Post New Ships) Margin · FY27 · High confidence 30%

    From 40-45% today

    So, I've been maintaining anything above 25-30% is good. So, I think we'll remain at 30-ish percent even after that.

    — Mr. Vineet Agarwal

  • Supply Chain EBITDA Margin Margin · going forward · High confidence 9.5-10.5%
    But going forward is the EBITDA margin at 9.5 to 10.5 percent range is what we expect for this business.

    — Mr. Vineet Agarwal

Growth

  • Supply Chain Growth Growth · next fiscal · High confidence 15%
    we are quite confident about the 15% range plus minus a few percentage points for growth in the next fiscal all score for supply chain.

    — Mr. Vineet Agarwal

  • Console Level Growth Growth · achievable · High confidence 10-12%
    The guidance that we kept of 10-12%, we should be able to get to on a console level

    — Mr. Vineet Agarwal

  • Transystem JV Growth Growth · next year · High confidence 10%+
    I think, yes, we can take a 10 plus percent range.

    — Mr. Vineet Agarwal

Capex

  • FY26 Capex Spend Capex · this fiscal · High confidence 350-375 crores

    Previously 450 crores (budget) → 350-375 crores

    I think we've reached about 266 crores. We should get between 350 and 375 crores for this fiscal.

    — Mr. Vineet Agarwal

  • FY27 Capex Budget Capex · next financial year · High confidence 450-500 crores
    So, we expect the budget to be closer to 450-500 around the same range. This year, as I said, we'll probably end at 350-375. But yeah, so it will be higher in the next financial year.

    — Mr. Vineet Agarwal

What to watch in Q4 FY26

Freight Business Performance

next two quarters
Current flat and slightly lower margins, challenges for another one or two quarters
Target trends looking better, start looking up

Why it matters

Improvement in the freight division is crucial for overall profitability given its current challenges and management's stated timeline for revival.

freight business has been going through some challenges, and the numbers are reflecting that we expect another one or two quarters more of these challenges and then things should start looking up.

Risks & concerns

  • Competitive Pressure Across All Segments

    medium

    Intense competition in freight, supply chain, seaways, cold chain, and railways due to India's attractiveness for logistics investments, including domestic and overseas players.

    Management acknowledged

  • Freight Business Challenges

    medium

    The freight business is experiencing challenges with flat to slightly lower margins, expected to continue for another one or two quarters, partly due to a weaker MSME sector.

    Management acknowledged

  • Seaways Margin Compression Post FY27

    medium

    Expected compression of Seaways EBIT margins from 40-45% to ~30% for FY27 due to anticipated higher fuel prices, increased competitive pressure, and higher depreciation/interest from new ships.

    Management acknowledged

  • ROCE Compression

    low

    Return on Capital Employed (ROCE) is compressed due to ongoing investments in the business.

    Management acknowledged

Q&A highlights

8 direct
Seaways Margin Decline Post FY27 Direct
No, I'm not saying there's going to be a steep decline, Krupa Shankar. But I think it could be just the fact that there is, I think, one is the fuel prices should go up, would go up a bit. Secondly, I think there could be increased competitive pressure. Third is that new ships will start coming in FY27. So, there'll be higher depreciation and interest on those as well.

Clarifies that the expected Seaways margin compression is not a steep decline but a stabilization to a lower range due to multiple factors, providing a more nuanced outlook.

Asked by Mr. Krupa Shankar

Supply Chain Growth Target for Next Fiscal Direct
Well, not a conservative expectation. I mean, we are quite confident about the 15% range plus minus a few percentage points for growth in the next fiscal all score for supply chain.

Management confirms a confident growth target for the supply chain business, indicating strong future prospects for this segment.

Asked by Mr. Krupa Shankar

Benefits of New Rake Additions Direct
Speaking, the benefits are more strategic rather than monetary to that extent because we are already hiring a lot of rakes from the government, from the railways on a regular basis. ... So, they will not have a specific large monetary impact.

Explains that new rakes are strategic for capacity and service to customers, rather than directly boosting monetary benefits, which helps set investor expectations.

Asked by Mr. Krupa Shankar

Competition Across All Business Segments Direct
So, competition pressure is not just in the JV, but across the board. I would say that, you know, whether it is freight, supply chain, seaways, cold chain, railways, everywhere there is competitive pressure. I think India being an attractive destination for companies.

Highlights the pervasive competitive intensity across all TCI's segments, attributing it to India's attractiveness as a logistics market.

Asked by Mr. Sunil Kothari

Freight Division Revival Strategy and Confidence Direct
I think some of the network expansion and some of those other things have to continue because those are more long-term measures rather than short term. ... The third is we have also made some management changes there. I think that should also start having an impact in the next quarter or so.

Details the multi-pronged approach (network, market, management changes) to revive the freight division, providing specific actions and a timeline for expected impact.

Asked by Mr. Deepak

Seaways Margin Trajectory (EBIT) Direct
So, it's 30 to 40% is what I indicated. And that's what will come overtime not in Q1 so fast, but over the year, because as I said, the new ships will get added on depreciation interest, etc. And a few months that it'll take for the ships to be fully utilized and come at full capacity and utilization. So, yeah, so that's the idea was not specifically for any quarter, but for the full FY27.

Clarifies the timeline for Seaways margin compression to ~30% EBIT, indicating it's a gradual shift over FY27 as new ships are utilized, not an immediate drop.

Asked by Mr. Deepak

Supply Chain EBIT Growth and Margin Range Direct
So, we are I think some years you get a good year because you can kick in some economies of scale. And some years are investment years like this year where your margin gets compressed a bit, but then they start taking off over the year. ... But going forward is the EBITDA margin at 9.5 to 10.5 percent range is what we expect for this business.

Provides a clear EBITDA margin range for the supply chain business and explains the cyclical nature of margin compression due to investment phases.

Asked by Mr. Deepak

Overall Earnings Growth with Seaways Margin Compression Direct
So, the margin will not necessarily come off primarily so I have also indicated that. Secondly, I think if as the JVs continue to do well, we should continue to get the dividend income. And thirdly, the other businesses will start picking up.

Management outlines how diversified operations, continued JV dividend income, and expected recovery in other segments will balance out the impact of Seaways margin compression on overall earnings.

Asked by Mr. Deepak

2 min read 5 chapters

Detailed narrative

Q3 FY26 Performance and Growth Drivers

TCI reported a moderate Q3 FY26, marking its 22nd consecutive quarter of year-on-year growth, supported by a volume pickup post-GST changes. The company's diversified operations continue to be a key strength, balancing performance across segments. Supply Chain Solutions demonstrated robust top-line growth of 15%, while joint ventures like Concor, Cold Chain, and Transystem grew by 20%+, 17%, and 12% respectively. Despite these positives, the freight business faced challenges with flat to slightly lower margins, a situation expected to persist for another one to two quarters.

Multimodal Strategy and ESG Impact

TCI's strong focus on multimodal logistics is yielding significant results, driving volumes and contributing to environmental sustainability. The company handled 2133 rakes in the first nine months of FY26, a substantial increase compared to the full previous year's 2500 rakes. This multimodal approach has also led to a reduction of 140,000 tons of carbon emissions. Coastal shipping, specifically mentioned in the budget, is targeted to increase its share from 6% to 12% over the next 20 years, aligning with TCI's strategic positioning.

Seaways Business Outlook and Margin Dynamics

The Seaways business continued its strong performance, with all ships operational. Margins for Q3 were in the 40-45% range, with similar levels expected for Q4. However, management anticipates a compression of these margins to approximately 30% EBIT for the full FY27. This projected decline is attributed to several factors: an expected rise in fuel prices, increased competitive pressure in the coastal shipping sector, and higher depreciation and interest costs associated with new ships scheduled to come online in FY27.

Capital Expenditure and Investment Plans

TCI's capital expenditure for FY26 is projected to be between ₹350-375 crores, with ₹266 crores already spent. For FY27, the company plans a similar budget in the range of ₹450-500 crores. A significant portion of the FY27 Capex, approximately ₹200 crores, is allocated for the two new ships. These investments are crucial for expanding capacity in warehousing, trucks, and rakes, supporting the company's long-term growth trajectory and strategic initiatives.

Competitive Landscape and Strategic Response

Management acknowledged intense competitive pressure across all business segments, including freight, supply chain, and seaways. This is largely due to India's growing attractiveness as a logistics market, drawing both domestic and international players. TCI's strategy to counter this involves diversifying into new value-added and niche areas, offering a wider range of services, and leveraging its integrated multimodal network to protect margins and ensure sustained growth. Internal management changes are also being implemented to improve performance, particularly in the freight division.

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