TCI Express

TCI Express reported a Q2 FY26 total income of ₹312 crores, marking a 7.6% sequential growth from Q1 but a slight 0.63% decline year-on-year. For the first half of FY26, total income stood at ₹602 crores, a 1.15% decrease compared to the same period last year. Despite the top-line challenges, the company maintained its operational efficiency, with Q2 EBITDA at ₹39 crores (12.4% margin) and H1 EBITDA at ₹72 crores (12% margin). Profit after tax for Q2 was ₹25 crores (8.1% margin) and ₹46 crores (7.7% margin) for H1 FY26.

The Surface Express division, while the largest contributor, faced headwinds from moderation in certain industrial segments and a slow recovery in MSME activity, exacerbated by GST rate cuts. In contrast, the Rail Express segment delivered robust 25% year-on-year growth, supported by 25 new branch openings. The Air Express segment performed well, with International Air Express growing 40% year-on-year and the C2C Express vertical expanding by 15% during the quarter. Non-surface businesses collectively contributed approximately 18% to the total revenue.

TCI Express leased a larger sorting center in Mumbai, three times the size of the existing one, to improve operational efficiency and support future growth. The company is replicating automation technologies from Gurugram and Pune facilities in upcoming sorting centers in Kolkata and Ahmedabad. Automation has significantly reduced cargo turnaround time at sorting centers from 8 hours to 2 hours, and overall processing time from 12-18 hours to half, enhancing efficiency and gross margins.

Capital expenditure for H1 FY26 amounted to ₹28 crores, allocated towards branch expansion, sorting centers, and IT infrastructure upgrades. The company's long-term capex plan has been revised from an initial target of ₹500 crores over 3 years to ₹400 crores over 5 years, with ₹150 crores remaining to be spent in the next 1.5 years. TCI Express continues to operate debt-free, maintaining liquid assets of ₹150 crores, though cash flow from operations for H1 FY26 was ₹20 crores, which is expected to improve.

Management is focused on expanding multimodal operations and entering new verticals like defense, EV, and solar energy. Strategies for the surface business include expanding the branch network, strengthening teams at the branch level to target more SMEs, and increasing direct sales teams, particularly in eastern and southern India. The company aims for 8% volume growth and 10% revenue growth for FY26, targeting EBITDA margins of 12.5-13% in the coming quarters^⏳ and a full-year margin of 12.5% plus. A long-term normal margin of not below 15% is envisioned with improved truck utilization.

TCI Express implemented price hikes of 25 basis points this quarter, following 50 basis points last quarter, with a target of 1.5-2% for the full year. Management indicated that price undercutting is not a significant concern in the B2B express industry, where pricing is a small percentage of product value; instead, volume is the key challenge. The company is also strategically refocusing on the B2C segment, targeting small D2C customers and aiming to grow this vertical to a ₹100 crore product in two years, while ensuring margin preservation.