Transport Corp.

The company acknowledged a significant impact from the India-Pakistan conflict, which set back business momentum for four to five months, leading to cancelled meetings, delegations, and supply chain disruptions. Despite this, management noted positive consumer trends, a good festival season outlook, and an estimated good monsoon. The overall market showed a mixed trend with IIP being mixed and manufacturing PMI slightly higher, leading to some customer skepticism regarding tariffs and delayed plans.

TCI continued to strengthen its logistics infrastructure, increasing its warehousing footprint by 1 million square feet to approximately 16 million square feet and expanding its reefer vehicle fleet to 250 units. The company emphasized its unique multimodal network, handling 2,500 rakes last year (7-8 rakes daily) and leveraging technology like AI for dynamic route management. These investments underpin TCI's ability to offer comprehensive, single-window logistics solutions across road, rail, and sea.

The Freight segment experienced a moderate top-line growth of 4.3% for FY25, with margins lower than the previous year, but management believes it is bottoming out. The Supply Chain segment demonstrated robust performance, growing 15% quarterly with EBIT growth of 12.5%, driven by strong warehousing demand and new contract acquisitions. Joint ventures also performed well, with the Concor JV growing 32% and the Mitsui automotive logistics JV increasing its top line by 17.2%. The Seaways segment maintained stable value growth but is expected to be flattish in revenue, with two new ships scheduled for FY27.

Recognizing the higher profitability of the Less-Than-Truckload (LTL) business (operating margins around 20% compared to FTL's 10%), TCI is renewing its thrust in this area. Strategies include deploying more ground teams, automating processes, utilizing higher tonnage trucks, modernizing hubs, and aggressive B2B and social media marketing. The company aims to incrementally increase its 36% market share in LTL by enhancing customer stickiness through value-added services like online ordering and control tower visibility.

TCI has established a separate subsidiary for chemical logistics, anticipating high growth driven by India's 'China Plus One' strategy and increasing exports. This move addresses the need for high compliance and corporate governance in chemical logistics. The company is actively seeking a joint venture partner to accelerate growth and leverage specialized expertise, expecting the subsidiary's current revenue of approximately 40 crores in FY25 to potentially double or triple in volume.

For FY25, TCI's capital expenditure was approximately 300 crores against a projected 375 crores. The company plans a higher capex of 400-450 crores for FY26, allocated across shipping (two payments), trucks, rakes, land, and building. Funding for these investments is expected to be approximately 70% from internal accruals and 30% from debt, reflecting a balanced and sustainable capital allocation strategy.

TCI provided a guidance of 10-12% top-line and bottom-line growth for FY26, which is slightly subdued compared to the previous year. Management emphasized a conservative outlook, prioritizing margin sustainability over aggressive growth. They stated a willingness to sacrifice some growth if it means avoiding margin compression, aiming to maintain overall profitability while focusing on high-growth segments and operational efficiencies.