Home / Markets / Stock Markets /  Motilal Oswal bullish on this multibagger stock, sees over 38% upside

Transport Corporation of India (TCI) has developed robust capabilities in multimodal Logistics via its presence across major transportation modes, highlighted brokerage Motilal Oswal. The company has well-diversified service offerings from Road freight, integrated Supply Chain solutions, Sea freight, to a joint venture with CONCOR for Rail freight.

“These capabilities would be a key enabler for consistent growth in volumes and earnings for TCI over the next few years. With an improving share of the Seaways segment, margin is expected to remain at elevated levels," the note stated.

Motilal Oswal has a Buy rating on the multibagger stock with a target price of 880 per share, implying a potential upside of over 38% from the current level. TCI shares have rallied over 145% in a year, whereas the scrip is down about 12% in 2022 (year-to-date or YTD) so far.

The brokerage expects the growth momentum to continue, with a pickup in economic activity, normalization in transportation activity, and government reforms leading to formalization and market share gains for organized players like TCI.

Road freight will benefit from impact of reforms like GST and e-way bill, which will result in a shift in market share towards organized players, and improved road connectivity, reducing the turnaround time. Further, the Supply Chain segment is expected to grow well as issues related to the Auto sector stabilize. The increasing penetration of supply chain offerings into other sectors will aid growth, the brokerage highlighted.

"The Seaways segment is expected to grow well, with higher volumes and improved realization. The purchase of a new ship in FY23 will help boost the share of the high margin Seaways segment, which will aid earnings growth," Motilal Oswal's note added.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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