TCI Express — Q3 FY26 earnings call

Call held 3 Feb 2026

Management summary

TCI Express reported a stable Q3 FY26 with 6% YoY revenue growth and improved EBITDA margins, driven by strong performance in specialized express segments. The company maintained a robust balance sheet and declared an interim dividend. Management outlined plans for continued growth, margin improvement, and strategic investments in infrastructure and sales force expansion, while addressing challenges like labor costs and working capital.

Highlights

  • Q3 FY26 Income from operations grew 6% YoY to ₹314 crores, reflecting stable performance despite a mixed operating environment.

  • EBITDA for Q3 FY26 increased to ₹37 crores from ₹33 crores last year, resulting in an EBITDA margin of 11.6%.

  • Strong growth in specialized segments: Rail Express grew 24% YoY, Domestic Air Express 14% YoY, International Air Express 28% YoY, and C2C Express 32% YoY.

  • The company maintained a debt-free balance sheet with a strong net cash position of ₹146 crores and a healthy current ratio of 3.38 times.

  • Interim dividend of ₹7 per share declared, demonstrating commitment to shareholder value.

Concerns

  • 9M FY26 Income from operations showed only 1% growth, indicating subdued performance over the nine-month period.

  • Working capital cycle increased to 21 days (receivable days at 60 days) compared to the previous quarter, attributed to festive season volumes and collection timing.

  • Employee costs increased due to the one-time impact of labor code implementation (₹60 lakh) and expansion of the sales force.

Key financials

3 periods

Headline

  • Current Ratio
    3.38×
  • Working Capital Cycle
    21 days

Q3

  • Income from Operations
    ₹314 Cr
    YoY +6% QoQ +2%
  • Total Income
    ₹317 Cr
  • EBITDA
    ₹37 Cr
    YoY +12.1%
  • EBITDA Margin
    11.6%
  • PAT
    ₹23 Cr
  • PAT Margin
    7.2%
  • Volume
    2,55,000 metric tonnes

9M

  • Income from Operations
    ₹909 Cr
    YoY +1%
  • Total Income
    ₹919 Cr
  • EBITDA
    ₹109 Cr
  • EBITDA Margin
    11.9%
  • PAT
    ₹69 Cr
  • PAT Margin
    7.5%
  • Return on Capital Employed
    19.6%
  • Volume
    7,37,000 metric tonnes

What they filed

Q1 FY27: revenue up 9.1%, net profit up 5.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue312 296 307 287 309 −1%314 +6%328 +7%313 +9%
EBITDA37 29 26 28 34 −8%32 +10%32 +23%31 +11%
Net profit25 19 19 19 24 −4%22 +16%16 −16%20 +5%
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

  • Surface Express
    — YoY Growth81% Share of Revenue (FY26 end target)
  • Rail Express
    24% YoY Growth
  • Domestic Air Express
    14% YoY Growth
  • International Air Express
    28% YoY Growth2% Share of Revenue
  • C2C Express
    32% YoY Growth
  • E-commerce Express
    2.5% Share of Revenue
  • Other Services (Rail, Air, C2C, E-commerce)
    18.5% Share of Revenue (FY26 end target)
  • Top 5 Sectors (Auto, Pharma, Engineering, Electronics, Textile)
    55% Share of Revenue
  • Retail Sector (End-user industry)
    8.5% Share of Revenue

Capital allocation

high confidence
  • Capex ₹400 Cr Cut — revised 5-year plan to be finished earlier
    • Branch expansion
    • Sorting center infrastructure
    • IT upgrades

    Previously planned ₹500 Cr

    Free cash flow for the 9M stood at Rs. 15 crores. Additionally, the Company revised its projected Capex to Rs. 400 crores from the earlier plan of Rs. 500 crores in five years tenure, which will be finished in FY27, so it will be revised from Rs. 500 crores to Rs. 400 crores. So remaining period we will be done almost like Rs. 150 crores in one and a half years' time.
  • Debt Net ₹146 Cr
    The Company continued to operate with a debt-free balance sheet. The net cash position remained strong at Rs. 146 crores, supporting ongoing investment and operational requirements.
  • Dividend ₹7/share (interim)
    Furthermore, as part of our ongoing commitment to shareholder value, we are pleased to announce an interim dividend of Rs. 7 per share, representing a payout of 350% on the face value.
  • Liquidity Liquidity disclosed Net cash position of Rs. 146 crores and current ratio of 3.38 times highlight strong liquidity and balance sheet flexibility.
    The net cash position remained strong at Rs. 146 crores, supporting ongoing investment and operational requirements. ... Current ratio remained healthy at 3.38 times, highlighting strong liquidity and balance sheet flexibility.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY27 · High confidence 17-18%
    Yes. 2027, so we are looking for 15% plus kind of volume growth. And with the 2% price hikes, so 17%, 18% kind of revenue growth we are looking for.

    — Mukti Lal

Profitability

  • PAT Margin Profitability · FY27 · High confidence 20% plus
    And accordingly, profit margin like PAT level, we will be increasing it in the range of 20% plus.

    — Mukti Lal

Realization

  • Realization Increase Realization · FY26 · High confidence 1% (100 bps)
    So in this year we target to increase the yield by at least 100 basis points, 1% basically.

    — Mukti Lal

  • Realization Increase Realization · FY27 · High confidence 2%
    And next year we are targeting 2%, again, next year also 2%.

    — Mukti Lal

  • Realization Increase Realization · by FY28 · High confidence 5%
    So by like FY 2028, we will be in a situation to increase my realization by 5%, and that directly adds to our profits.

    — Mukti Lal

Volume

  • Volume Growth Volume · Q4 FY26 · Medium confidence high single-digit or double-digit
    So yes, I just mentioned on quarter, we will be finish high single-digit or like might achieve double-digit growth in this quarter.

    — Mukti Lal

EBITDA Margin

  • EBITDA Margin EBITDA Margin · FY27 · High confidence 13% plus
    Yes, I think we will do in the next two, three years. Next year we will be targeting to be in the range of 13% plus.

    — Mukti Lal

  • EBITDA Margin EBITDA Margin · FY28 or FY29 · High confidence 15% plus
    And then subsequently, in each year we can be increased 100 basis points very easily. So, again, I think by FY28 or FY29 we will achieve 15% plus.

    — Mukti Lal

Capex

  • Total Capex Capex · by 2027 · High confidence ₹400 crores

    Previously ₹500 crores → ₹400 crores

    Rightly said. Well, we will keep like by 2027, Rs. 400 crores and then additional Rs. 100 crores by 2028. So you rightly said, by 2028 we will consume this Rs. 500 crores fully. We are on that mark.

    — Mukti Lal

  • Total Capex Capex · by 2028 · High confidence ₹500 crores

    — Mukti Lal

What to watch in Q4 FY26

FY27 Revenue Growth

FY27
Current Q3 FY26 YoY 6%
Target 17-18%

Why it matters

To verify if the company achieves its ambitious revenue growth target driven by volume and price hikes.

Yes. 2027, so we are looking for 15% plus kind of volume growth. And with the 2% price hikes, so 17%, 18% kind of revenue growth we are looking for.

Risks & concerns

  • Increased working capital cycle

    medium

    Net working capital cycle increased to 21 days due to festive season volumes and timing of collections, though management aims to reduce it.

    Management acknowledged

  • Labor cost inflation

    medium

    Labor costs are on an increasing trend due to government regularization and labor laws implementation, impacting overall costs.

    Management acknowledged

  • Demand variability across quarters

    low

    The operating environment reflected a mixed trend across sectors, and there was a dip in volumes after Diwali, though picking up in December.

    Management acknowledged

Q&A highlights

6 direct
SME client stickiness and shift to 3PL Direct
No. SMEs are not hit much. What kind of SMEs we are dealing with that they are like prudent one and then fully compliant. And they have like full supply chain and businesses across India, we are helping them to deliver everywhere. So, our ratio is maintained with them, and we are getting the business from them regularly. And currently, ratio with them is around 49%, and we will keep continuing.

Addresses concerns about SME client retention and potential shift to lower-cost logistics models amidst economic headwinds, confirming TCI Express's strong relationship with its SME base.

Asked by Kanish Jain

Infrastructure capacity for increased volume Direct
And our MD has mentioned, we are hiring new people for the sales and operation both. So, we are future-ready for wherever we like win any contract, we can get that almost like once we will get like 30%, 40% revenue growth in existing infrastructure it's okay, we will do that. But infrastructure is also like in a two way. One is my fleet, and another one is our sorting centers and branch network. So sorting center and branch network is fine, but fleet will be added wherever it's required because it's a variable component. In existing fleet, our utilization level is around 83% plus.

Provides clarity on the company's ability to scale operations and absorb higher volumes with existing infrastructure and flexible fleet management, indicating readiness for growth.

Asked by Kanish Jain

Company's priority: top line vs. margin Direct
Yes. Our approach is always to get the profitable business continuously. So, we will keep a balance, and we maintained that balance since more than last two decades, where we are getting business in 50%, 50% from SME and 50% from the bigger customers. So that tendency in that vision we will be going ahead also with even newer services, rail and C2C we will give that way.

Confirms management's balanced approach to growth, prioritizing profitability and a diversified customer base over aggressive top-line expansion at the expense of margins.

Asked by Kanish Jain

Competition from Delhivery and market dynamics Partial
So, we do not want to comment on particular competition. But you see their results also, so every competition has their own space and own fill, but we are very clear on our sense. We will keep the revenue growth with the profitability only. And this market is very big because we were in a slightly subdued revenue growth in last five, six quarters because our focus and our dependence was on only one particular segment only, surface, that was the biggest one. But now we face this thing and then we started the newer services also.

Management acknowledges competition but emphasizes their focus on profitable growth and service quality, suggesting a differentiated strategy rather than direct price competition.

Asked by Ravi Kumar Naredi

Q4 momentum and early price hikes Direct
Yes. So, Koundinya, basically this environment has improved a lot in the sense of freight movement, in the sense of volume growth for the express industry. And you have seen the other competition number also, everyone is increasing. ... So customer is also intends to like give slight hike to prices. So that environment has also built up. So now we are building up our capabilities and surely we will achieve what we like promising for the Q4 and then subsequently go on.

Provides positive outlook for Q4 FY26, citing improved freight movement, stabilized costs, and customer willingness for price hikes, indicating potential for stronger performance.

Asked by Koundinya Nimmagadda

Employee costs and sales force expansion Direct
So basically, this cost also includes the labor code impact also, which is around Rs. 60 lakh which is included here. Though we were prepared long time back where we like tuning all the like everything. So this time the gratuity impact was there and that we have taken into consideration. So that's why it looks like inflated there. ... We are also planning to increase the number from 300 to 500 by March end.

Explains the increase in employee costs as a one-time labor code impact and strategic investment in sales force expansion, which is expected to drive future growth.

Asked by Koundinya Nimmagadda

EBITDA margin recovery timeline Direct
Yes, So we are certainly trying to achieve that back to this normal number of 15% plus because, again, why this EBITDA has been impacted, which is, again, one reason is revenue. Second one, because we are building up the capabilities for the other services, so we have to spend the money on creating the network like for the rail, for Air Express and all, And once we will be like, again, you have seen the numbers where we are getting the high revenue from these segments. So once we will get the like utilization level of this network will be increased, then certainly we will improve our EBITDA very fast. ... Next year we will be targeting to be in the range of 13% plus. And then subsequently, in each year we can be increased 100 basis points very easily. So, again, I think by FY28 or FY29 we will achieve 15% plus.

Provides a clear roadmap and timeline for EBITDA margin recovery, linking it to increased utilization of new service networks and gradual improvements.

Asked by Chandramouli Jagannathan

2 min read 5 chapters

Detailed narrative

Q3 FY26 Performance Overview

TCI Express reported a stable Q3 FY26 with Income from operations growing 6% year-on-year to ₹314 crores, and total income reaching ₹317 crores. EBITDA for the quarter stood at ₹37 crores, up from ₹33 crores in the prior year, translating to an EBITDA margin of 11.6%. Profit after tax was ₹23 crores, with a margin of 7.2%. For the nine-month period, Income from operations grew 1% to ₹909 crores, with EBITDA at ₹109 crores (11.9% margin) and PAT at ₹69 crores (7.5% margin).

Segmental Growth and Product Mix

The company witnessed strong growth in its specialized express segments. Rail Express grew 24% year-on-year, Domestic Air Express 14%, International Air Express 28%, and C2C Express 32%. Surface Express, the largest contributor, resumed growth. By FY26 end, the company expects surface to account for 81% of revenue, with other services (rail, air, C2C, e-commerce) contributing 18.5-19%. E-commerce and International Air Express each contribute around 2-2.5% of revenue.

Balance Sheet and Capital Allocation

TCI Express maintains a debt-free balance sheet with a strong net cash position of ₹146 crores and a healthy current ratio of 3.38 times. Capital expenditure for 9M FY26 was ₹45 crores, primarily for branch expansion, sorting center infrastructure, and IT upgrades. The company revised its 5-year Capex plan from ₹500 crores to ₹400 crores, aiming to complete it by FY27, with an additional ₹100 crores by FY28. An interim dividend of ₹7 per share was declared, representing 350% on face value.

Strategic Initiatives and Operational Efficiency

The company added five new branches in Q3 FY26 to strengthen its network reach and is implementing revised pricing earlier than usual. Focused efforts are underway for organized business growth and cultural transformation, including structured training for frontline teams. TCI Express also achieved ISO certifications (9001:2015, 14001:2015, 45001:2018) and was recognized as a Great Place to Work for the sixth consecutive year, reinforcing its commitment to quality and people.

Outlook and Margin Improvement Targets

Management projects 15% plus volume growth and 2% price hikes for FY27, leading to 17-18% revenue growth. They aim for a PAT margin of 20% plus in FY27. Realization is targeted to increase by 1% this year, 2% next year, and 5% by FY28. The company expects EBITDA margins to reach 13% plus in FY27 and 15% plus by FY28 or FY29, driven by increased utilization of new service networks and disciplined cost control.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Services earnings calls