BackAnand Rathi bullish on this logistics stock, sees strong upside
TCI is likely to benefit from the government’s thrust on the Gati Shakti initiative, as per the brokerage
PremiumTransport Corporation of India (TCI) is likely to benefit from the government’s thrust on the Gati Shakti initiative to reduce logistics costs and enhance multimodal shift, as per domestic brokerage and research firm Anand Rathi.
“The programme will be critical in coordinating all of the efforts and activities around the construction of this multimodal infrastructure. The Government’s vision of Gati Shakti coupled with customers demand for contract logistics and technology driven value-added services augur well for the Company in the coming years," the note stated.
Anand Rathi said that it believes that TCI is well placed in India’s logistics industry given its strength and capability. Various government initiatives and key strategies will drive the growth of the logistics sector. Logistic industry is key contributor to the country’s vision of being $5 trillion economy by 2024-25. The rise in e-commerce, growing omni-channels, China+1 strategy will also add to the growth of the industry, it added.
The brokerage has initiated its coverage on TCI shares with a Buy rating and with a target price of ₹920 per share. The logistics stock is up about 6% in 2022 (YTD) so far as compared to a flat rise in BSE Sensex.
TCI is an integrated multimodal logistics and supply chain solutions provider. It provides services and solutions to various industries including automobiles, retail, hi-tech, health care and life sciences, energy and renewables, e-commerce, chemicals, iron and steel, agriculture, aviation and defence.
TCI is making a capex of around ₹2,500 million in the FY23. Out of this, about ₹1,000-1,250 million will be spent on ships and containers and another ₹300-500 million will be utilized for trucks. It will also be spending ₹750 million towards building warehouses. The company has been able to manage its liquidity well and almost debt free, Anand Rathi highlighted.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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