Back₹2 to ₹708: Multibagger stock turns ₹1 lakh to ₹2.83 Cr in 20 years: Should you buy?
With a market capitalization of Rs. 5,498.99 crore, Transport Corporation of India Ltd. (TCI) is a mid-cap corporation that operates in the logistics industry
PremiumWith a market capitalization of Rs. 5,498.99 crore, Transport Corporation of India Ltd. (TCI) is a mid-cap corporation that operates in the logistics industry. India's leading provider of supply chain solutions and integrated multimodal logistics is Transport Corporation of India. One of the multibagger stocks that have made investors crorepati in a 20-year period is Transport Corporation of India Ltd (TCI) stock.
Share price history of Transport Corporation of India
The shares of Transport Corporation of India Limited closed on Friday at ₹708 apiece, down by 0.83% from the previous close of ₹713.90. The stock price climbed from ₹2.50 on January 24th, 2002 to the current market price, reflecting a multibagger return and an all-time high of 28,220.00%. As a result, if an individual had invested ₹1 lakh in TCI shares 20 years ago, that amount would today be worth ₹2.83 crore. In the last 5 years, the stock has generated a multibagger return of 151.06% which results in a CAGR of 20.21% approx.
In the past year, the stock has gained 70.87%, and YTD, it has dropped 3.13% in 2022. On the NSE, the stock had touched a 52-week-high of ₹858.60 on (17-January-2022) and a 52-week-low of ₹403.10 on (02-September-2021) indicating that at the current market price the stock is trading 17.54% below the high and 75.63% above the low. At the current market price the stock is trading below 5 days, 10 days, 20 days, and 50 days EMA but higher than 100 days and 200 days Exponential Moving Average (EMA). The RSI indicator value for Transport Corporation of India Limited (TCI) as of 02/09/2022 is 45, indicating that the stock is neither in an overbought nor oversold zone.
Q1FY23 Result of Transport Corporation of India
On a standalone basis, the company's revenue from operations reached ₹807 Cr for the quarter that ended June 2022, compared to ₹610 Cr in Q1FY22, a YoY growth of 32.2%. On a consolidated basis, the revenue from operations reached ₹903 Cr in Q1FY23 compared to ₹696 Cr in Q1FY22 which represents a YoY growth of 29.74%. On a standalone basis, EBITDA of Rs. 115 Crores was recorded by the company compared to Rs. 82 Crores in Q1 FY2022, a YoY growth of 40% and on a consolidated basis the company recorded an EBITDA of Rs. 119 Crores in Q1FY23 compared to Rs. 83 Crores in Q1 FY2022 representing a YoY growth of 43.37%. On a standalone basis, the company reported a PAT of Rs. 77 Crores compared to Rs. 48 Crores in Q1 FY2022 a YoY grew by 58.4% and on a consolidated basis the company recorded a profit after tax (PAT) or net profit of Rs. 79 Crores in Q1FY23 compared to Rs. 47 Crores in Q1 FY2022, a YoY growth of 65.9%.
Commenting on the result, Mr. Vineet Agarwal, Managing Director TCI stated, “the company continued to demonstrate steady performance due to its adherence to core business fundamentals. Impact of high fuel prices, general inflation and volatile demand in certain sectors were key challenges which the company maneuvered to deliver value to its customers."
“The emphasis on providing seamless coastal services and rail logistics via a multimodal network has got further traction with customers off-setting their carbon emissions besides managing their cost. TCI's consistent performance as leaders in logistics got reinforced when it bagged two awards under the categories of "Best Warehouse Service Provider" & "Best Cold Chain/Refrigerated Service Provider" in the first National Logistics Excellence Awards announced by the Government of India, Ministry of Commerce & Industry," he further added.
Should you buy the shares of Transport Corporation of India?
Taking the results into consideration of Transport Corporation of India (TRPC), the research analysts of the broking firm Motilal Oswal said “We continue to see TRPC as a long-term play, backed by: a) a diversified clientele, b) improving share in the LTL business in the Road Freight division, and c) elevated contribution from the high-margin Seaways segment. We expect TRPC to clock a revenue/PAT CAGR of ~18%/19% over FY22-24. The stock trades at 14x FY24E EPS. We maintain our Buy rating on the stock with a target price (TP) of INR860 (based on 17x FY24E EPS)."
The research analysts of the broking firm Sharekhan said “Transport Corporation of India (TCI) reported better-than-expected consolidated revenues of Rs. 903 crore (up 29.7% y-o-y, up 0.6% q-o-q) during Q1FY2023 led by low base along with sustained demand momentum from Q4FY2022. All three key verticals viz. Seaways (revenues up 32.5%, driven by higher freight rates), SCM (up 33.5% y-o-y, led by auto sector demand revival) and Freight (up 30.8% y-o-y, although down 3.6% q-o-q led by MSME slowdown) fared well. However, consolidated OPM at 11.5% (down 177 bps q-o-q) was lower than our estimate of 12.9%. All three verticals viz. Seaways (rising input costs), freight (lower LTL mix) and SCM (inability to pass thru higher fuel costs in large accounts) felt sequential pressure on OPM. Overall, consolidated operating profit/net profit rose by 37%/66% y-o-y at Rs. 104 crore/Rs. 78 crore. The management retained its topline and bottom line growth guidance of 10-15% y-o-y for FY2023 conservatively factoring a bit of slowdown towards the fag end of the fiscal year. Its Capex plan of Rs. 300 crore remains unchanged although it is yet to zero in on a ship for acquisition."
“TCI’s multi-modal capabilities are expected to benefit it from the logistics sector’s growth tailwinds led by GST, government thrust on schemes such as Atmanirbhar Bharat, PLI-led manufacturing push, and global supply chain re-alignments. The seaways division is expected to sustain strong performance led by increased freight rates although gradual normalization of OPM is expected. The addition of one more ship would be keenly awaited and provide further fillip to its seaways division. We expect TCI to be on a long-term growth trajectory, driven by positive sectoral fundamentals and its inherent strengths and capabilities. We retain our Buy rating on the stock with a revised SOTP based target of Rs. 850 lowering our valuation multiples to factor in the near-term macro headwinds affecting especially the MSME segment," further added the research team of Sharekhan Ltd.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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