Tejas Cargo

Tejas Cargo experienced a 'steady and constructive period' in H1 FY26, marked by significant progress in fleet expansion, market presence, and technology adoption. The company reported a 20% year-on-year increase in total income to ₹306 crores and a substantial 44% year-on-year rise in net profit to ₹13 crores. This performance was underpinned by a 69 bps expansion in net profit margin and a 6% year-on-year growth in EPS to ₹5.27, reflecting improved operating leverage and trip efficiencies.

The company's fleet expanded to 1,231 vehicles, with 83 additions in Q1 and 32 in Q2, including new EVs and car carriers. The car carrier segment, launched two months prior, has already deployed 50 vehicles and secured partnerships with TVS, Hyundai, and Toyota, with Tata, MG, and Murphy expected to be onboarded within the next three to four months. Tejas Cargo has also diversified into coal mining, with several tenders in hand, and cross-border import-export, currently handling 200-300 containers monthly from China.

Technology is a core focus, with HRMS and ERP Phase-I already implemented and Phase-II (covering inventory and repair workflows) on track for a December rollout. The fleet is equipped with advanced tools like GPS, Geofence, ADAS, AI-enabled cameras, and digital locks. These technologies have significantly improved safety, leading to a 60% reduction in major accidents, and enhanced security, resulting in an 80% reduction in theft. These advancements contribute to a high fleet utilization rate of 82% and a 10% improvement in revenue per trip.

For H1 FY26, Tejas Cargo reported a total income of ₹306 crores, marking a 20% year-on-year growth. EBITDA increased by 5% year-on-year to ₹48 crores. Net profit saw a robust 44% year-on-year increase, reaching ₹13 crores, with EPS at ₹5.27, up 6% year-on-year. The net profit margin expanded by 69 basis points. Management anticipates higher volumes in H2 FY26, which is typically a stronger period for the logistics industry.

The company operates within a supportive industry environment, with India's 3PL market projected to grow at 6-14% CAGR to USD48-70 billion by 2030, driven by strong demand and improving infrastructure. Tejas Cargo is actively exploring new opportunities in mining logistics, rail logistics, cross-border freight, and industrial mine minerals. The long-term strategy involves maintaining a hybrid fleet model, aiming for 60-70% owned vehicles and 30-40% market hiring, to optimize utilization and manage seasonality.

In FY25, approximately ₹48 crores from IPO proceeds and ₹20-22 crores from internal accruals and debt were deployed for CAPEX. For H2 FY26, the company plans to add 40-50 additional vehicles, with funding sourced partly from internal accruals and partly from existing bankers. The cost of debt for commercial vehicles is competitive, ranging from 8.2% to 8.6%. Management stated no plans for refinancing existing debt, as current refinancing rates are higher than their existing cost of debt.

Tejas Cargo maintains strong relationships with its customers, with 90% of revenue derived from large corporates and a base of over 85 active clients. While the top 10 clients contributed 78% of H1 FY26 revenue, the company aims to reduce this concentration to 60-65% in H2 FY26. This diversification is being achieved by expanding into new segments such as steel, cement, mining, coal, fly ash, and car carrier logistics, providing a wider and more predictable demand base.