Transport Corp.

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.

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.

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.

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.

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.