TCI Express Limited (NSE: TCIEXP) Q3 2025 Earnings Call dated Feb. 06, 2025
Corporate Participants:
Chander Agarwal — Managing Director
Mukti Lal — Chief Financial Officer
Unidentified Speaker
Analysts:
Mohit Lohia — Analyst
Unidentified Participant
Presentation:
Mohit Lohia — Analyst
Hi, good afternoon, everyone. I’m Mohit Loya from ICICI Securities. I thank you all for joining us today for quarter three FY ’25 earnings call of TCI Express Limited. From the management side, we have Mr Chandra Agarwal, Managing Director; Mr, Chief Financial Officer; Mr Heman, Chief Operating Officer of Surface Express Busines; Mr Ashok Pande, Chief Operating Officer of Multimodal Logistics Express. This webinar is being recorded for the compliance reason and during the discussion, there might be certain forward-looking statement which must be viewed in conjunction with the risks that the company faces. I now hand over the call to Mr Agarwal for opening remarks, which will be followed by Q&A session. Thank you, and over to you, sir.
Chander Agarwal — Managing Director
Thank you, Mr. Good evening, everyone, and welcome to the Q3 and nine months financial ’25 earnings conference call of TCI Express. Thank you for taking the time to join us today. Our earnings presentation has been shared on the website and stock exchanges, and I hope you had a chance to go through it. I will begin by providing an overview of our business performance and key developments, followed by our CFO, Mr Mugti, who will further elaborate on the financial performance for Q3 and nine months financial year ’25. During the quarter, we continued to demonstrate operational resilience and strategic adaptability in a dynamic market environment. The logistics sector faced challenges due to moderation in manufacturing activity, evolving demand trends and seasonal factors. India’s manufacturing PMI softened slightly in the later months, reflecting slower production levels. The festive season demand in October was lower-than-expected, while November and December saw a marginal slowdown impacting overall freight movement. Inflationary factors, including annual toll divisions of 8% to 10% and increased labor and transport costs added pressure on operating expenses. Amidst the challenges, we remain focused on operational efficiencies, network expansion and automation, allowing us to maintain stable business performance. In the Air Express segment, we are strengthening our Metro City delivery network and have launched directly — direct delivery services to improve service levels and customer reach. The contribution from multimodal services is steadily increasing and we are planning to achieve 20% to 22% revenue-share from multimodal logistics in the next two to three years. During nine months ’25, we incurred a capex of INR20 crores, including INR9.38 crores in Q3 ’25, primarily directed towards expanding our branch network, constructing sorting centers and ramping-up IT infrastructure. Our debt-free balance sheet and disciplined financial management has resulted in strong cash-flow generation with INR40 crores cash-flow from operations during the period. Furthering our commitment to shareholder value, the Board has recommended an interim dividend of INR3 per share, reinforcing our confidence in the company’s financial stability and growth prospects. Our strong customer mix, extensive network and market positioning enabled us to maintain stable capacity utilization at 82%. We are honored to have received several prestigious record position this quarter, reinforcing our leadership in logistics and commitment to excellence. TCI Express was awarded the CII Scale Award 24 for supply-chain and logistics excellence from CII Logistics of Institute of Logistics, highlighting our technological advancement and operational strength. We are also featured in Forbes, India’s Select 200 companies with global business potential, 200 2024, recognizing our strategic growth and positioning. Our corporate social responsibility initiatives were acknowledged with the Indian CSR Award 24 by the brand Honchos and we are proud to have again achieved the Great Place to Work ’25-26 certification for the fifth consecutive year, underscoring our commitment to fostering a positive and employee-friendly work culture. Looking ahead, we remain optimistic about the anticipated recovery in economy — economic activity supported by government infrastructure investments, fiscal measures and a renewed focus on manufacturing growth. The Union Budget 25-26 introduced key measures to strengthen logistics. A new social sector scheme for gig workers would enhance job security, attracting skilled talent and improving service quality. Access to the PM Shakti database will optimize route planning, reduce transit timing, times and lower operational costs. Air cargo infrastructure upgrades will enhance express delivery efficiency, reducing lead times. These initiatives would provide a strong foundation for TCI Express to drive growth, innovation and operational excellence. With this, I hand over the call to Mr, who will take you through our financial performance for the quarter.
Mukti Lal — Chief Financial Officer
Thanks, sir. So now I’m just going through with like our presentation for the three-month quarter — this quarter and nine months consolidated. So I will quickly run that. So can you just go on a slide, please? Next slide. Yeah. So this is our like key features. This is almost nine year we are near to complete of nine year-after demerger. And our service is like 97% is B2B and 3% is B2C. And we have like 60,000 service locations. We have the 970% branches, 3,000 plus workforce. Next, please. These are the like our USP which we carrying since consistently we carrying since last two decades like business model, we carrying high-value cargo. We need really working hard on low working capital requirements, lowest — we have the lowest-cost structure and we also like expanding on a similar kind of services in Express logistics. We all have our own branches, then we have like continized movement 100%,, please? These are fundamentally — we’re offering six major services, which is surface, AI, domestic and international, C2C, rail and Culture Pharma Express, these are the services we offering. These are footprint in across India where we operating 970 branches, 280 sorting centers. Yeah. Right. These are two sorting centers we already like automated, Gurgaon and then followed by the Pune. Next would be, we will be, I think in an end of next year or maybe like first-quarter of FY ’27, we will be implementing the automation in Ahmedabad and Kolkata. We already finalized the contractor and soon will be starting — before the one March-end, we will be start the construction of these two facilities. There is a surface USB where we have had mentioned 60,000 pickup delivery location and 50,000 is a pickup locations and these are our strength here. Next, please. Air Express is, you know, USP of that we’re delivering in a measure 24 to 48 hours. Across India, we’re delivering — we’re covering 72 plus gateways. And we’re also delivering in Tier-2, Tier-3 cities with a time span of 48 to 72 hours. Next, please. These are the like international express where we’re delivering across the — across the world and we’re delivering through we almost have the 3,000 pickup point for international business. It is also growing very well and it is very positive movement from the — we’re also doing import from the other countries to deliver in India. So we’re doing the two-way. We are — we sending the metal from India to abroad and from abroad to India we delivery. Next, please. Rail Express, as we keeping very-high attraction from the customer is growing very well. Now we almost have the 150% — 150 routes and 5,000 customer-base. This is also increasing. Now we’re seeing continuously frequency of the customer, we’re getting the like reputative order from that though as-is next segment, but growing very fast C2C, again, as we mentioned in earlier calls, so it is a, you know growing sector is a niche segment, majorly this used by like auto industries where we clubbing like we picking from the one location, delivering two, three location at destination, also like we come from the two location delivering on one location. So these kind of service we’re giving and adding the new customer here. Next, please. Yeah, Cold Pharma, we again as mentioned, we are only focusing on pharma deliveries. So this is also running, but not on a like good speed is running in a normal way. Yes, please. These are the Q3 highlights where we achieved a revenue of almost INR300 crore with an EBITDA of INR33 crores, which is at 11% margin and profit after it is INR21 crores. We as mentioned INR3 we initially announced the dividend of second interim dividend of INR3. So put together is a INR6 rupees now yes we can escap that already discussed. So you know we seen clearly this visible in this industry, there is a two aspect, one in revenue side where few sectors still not improved, like one is lifestyle products, second is engineering goods as some other sectors also not improved. Second part, every like logistic service provider is facing challenge on cost side where you cost has increased for the drivers, toll tax and we also facing one more challenge is to be increase the air cost also due to like do apply off — of — do apply of these service provider and second is a privatization of these airports. So these are the two things where we face the challenge on the revenue side because volumes are low. Other side, cost pressure is also coming. So these two things clearly visible in overall industry purposes. Yeah. These are the like quarterly just 3/4 what our performance is. Yes, next please. This is a nine months where we seen a growth of INR900 crore-plus. There is a decline in revenues almost 3.5% and at EBITDA and PAT level is around almost 27%. This is a highlight for the nine months. So again, capacity utilization in our truck as seen is overall in Nine-Month is around 82% and we obviously have the two shorting center. Cash-flow operation is INR40 crores. Total dividend we have given like INR6 rupees. Revenue mix slightly changed in nine months. It is 51 — big customer and 49 is SME. In Q3 is also like slightly different. It is almost like 53%, big customer, 47% is our SME customer. That’s why one-off reason to decline in our margin levels. So cash profit is you’ve seen is a decline of only 25% and that has been reduced from INR114 crore to INR86 crores. Yes, please. These are again nine-month performance we had given for the comparison of last four years, please. Key ratios, if you notice like return on capital employed slightly declined because there wasn’t a reason because we — margins are slightly down and initially capex is growing fast. So I think in one initial or of two to Five-Year, we have to be faced like slightly moderate kind of return on capital — capital employed. Once we finish with the like capex, then we will be again start to enhance and have the planning to be go back to in the range of 35% plus. Cash conversion ratio is again strong. There is no challenge on that. It will be like in the range of 70%, please. Yeah. So again, I just discussed, we can skip. Leverage profile is robust. So again, if you see payable days are 35 days receivable days, 58, so net working requirement is in the range of 22 days. So for the running or our daily show is really not need any kind of funding and this is a self-sustainable and a system, yeah. You know in-spite of all the challenges, we still highest PAT margin in the industry, which you can see like out-of-the six industry players, we are the highest one. And second player here is also like our group company, TCI, yeah. We can escap that we already discussed in last. Strategic outlook is very clear. We will be, you know, diversified on the both way, customers as well as supplier side. We will keep continuing expanding branch network. This time we slightly slowed down that because we opening up the branches to cater SME customer majorly. We’ve seen like slowdown in SME customer. So we post that one for the time-being. And though we are opening up like in a — like one or two branch in a month, but not like aggressively going on, once we will be seeing the volume back from the SMEs, then we will be aggressively expand on the branch network side. Capex side, yes, it is also as per expectations, but in this year, I think it will be slightly low, but next year, we have very clear visibility for the capex of around INR110 crores. Yeah. This is our priority. So we will be keep continue to growing in the other markets. Sustainability side, yes, we will be ESG, we will be focusing on that and we will be put like basically to put EV vehicle for the last mile, first-mile deliveries or wherever it’s possible to put into a mid-mile, we will be give that. We will also like putting hard wherever we put building up new shorting centers we giving as a solar as for the electricity generation. So we will keep going on to putting our pressure to be these ESG — ESG initiatives. Technology, yes, is a backbone. So we also putting more-and-more digitalization in every function in company. Company yeah please we can escap that we can skip that so these again a long-term perspective logistic industry’s growth drivers. Yeah, we can escap that. This is a management team, please. Next. So this is clearly visible these things. Transportation cost has increased, margin has been declining in this particular time. Manufacturing activity is surprisingly in a good month where we anticipated a good month that has been include declining and lower consumption economic — I can’t say slowdown, but it’s like a muted one. One and customer confidence index has also like slightly reduced. So these are the things which is really clearly visible in an overall way. Yeah. Yeah, next please yeah next please next these are the as you already discussed with that yeah next please. So thank you very much. We can be now — we can be take the question-and-answer on that. We are happy to answer.
Questions and Answers:
Operator
So participants, we are going to open the floor for question-and-answers. Please raise your hands to ask your questions. So we’ll begin the question-and-answer with Mr Deora. MR. Deora, you can go-ahead with your question.
Unidentified Participant
Yeah, hi. I’m audible.
Operator
Yes, you are.
Unidentified Participant
Yeah. So, sir, very good evening. Just had a couple of questions. First, if you could just indicate what has been the volume growth for this quarter or rather degrowth, I think.
Chander Agarwal
Yeah. So volume is allow is reduced by almost 3% in this quarter.
Unidentified Participant
Okay, okay. Okay. So sir, I just wanted to understand, I mean though you know the growth has been pretty muted through many quarters now. So even this has impacted the margins also quite significantly, it’s come down by nearly if we see Y-o-Y, it’s down nearly 500 basis-points and even Q-o-Q, it is down by nearly 200 plus basis-points. So how are we seeing this market now? Because you have been mentioning about even in the earlier call that how other players are taking price hike is not known and market is very tough. So how do we see the 4th-quarter also shaping up now? Because I think this volume growth even in January, I don’t think there would have been much improvement. So would this volume run-rate of Q3 continued through Q4? And would this margin also which has come down to almost like single-digit now, would this be in this tight range?
Mukti Lal
Yeah, so very well. So you know there’s two type of things is happening simultaneously, like one is, you know, volumes are down, there is very clearly visible across the industry. We are like hit because first time getting hit and that’s why it is — volumes are down for that. And that’s why it is also hampering our margin because as you are aware, this prices from the SMEs is higher than my contract customer. So that’s the one-off reason. Second reason, that has never happened where volume declining and cost pressure is also simultaneously there. But in this year, this is a different situation where we facing the challenges and also muted volumes. Second, cost pressure, which is visible across the industry, which is, as I mentioned is contributed by increase in toll tax, increased by driver shortages, increased by labor cost. And in our cases are like added by fuel also by air cost. So these things is really — but and ultimately by lower-volume, we — our utilization of truck is reduced. So by these, you see in a two-way, once we will be like bounce-back with the volumes, once is a normalized situation, which is really very hard to comment on Q4 because once we like in last quarter, we see in the quarter — October month was slightly okay and then we’ve seen November and December month. December month is again always the best month, but we have not seen that kind of even degrowth on that month. That was one-off region also where e-way will site has closed on a last day. So that is also impacted by my value — my volume in this quarter at least 1.5% to 2% on that particular day. So these kind of thing is happening. So I’m not seeing any much difference, but it’s really very hard to comment on that. So this is the one volume side. Second, cost side, I think this will be continue because we are discussing with the customer. So our case, if you see earlier, we were the first one to take the price hike from the customer because 50% is a SME customer. But this time, SME customer is already facing the challenges due to-high inflation, high-interest cost. They are not able to support us on this time because again volumes are very less and they also have the like impact of muted growth. So weak like now touching the like all big customers, so they also assuring us to be giving the price hikes. So you know, gradually we’re getting that. In this quarter also, we’re getting a benefit of like getting a price impact of 25 to 30 basis-points. But from January onwards, we’re getting good price hikes from the customer. So both things will be like improve in this quarter and next year, I think hopefully we will be seeing the situation has improved a lot.
Unidentified Participant
Sure. So if the customer — competitors, you know couple of them had given a — I mean it’s public information like Dard and Gathiyat mentioned about a price hike from January onwards and we — VRL has already taken a price hike at the end of first-quarter. So have these price hikes gone into the system in case, it is much visible that it has already shown in the margin profile. But what about your other competitors like Gathi, Blue Dart and others from the unlisted side. Has the competition taken price increase? Because we have not taken price increase and still the volumes have not come by. So just some clarity on that, if you can provide it would be helpful.
Chander Agarwal
That is — I think you — whatever name you’ve taken for the competition, they also not growing in volumes, either they’re growing through the price hikes, I guess other we’ve taken so much price and that growth was also equal to that. So this means volumes are not there. Price may be due for them because you know, good thing was with us, we consistently taken the price hike over the period of four, Five-Year and that’s why our margin has jumped from 8% to 16% that was sustainable. But this is — this year is like slightly unique position where you know SMEs hit and we always like taking the price hike from them, so they are not able to increase. But I am not seeing other customer in express — pure express, they will be able to take the price hike because again this segment where we’re dealing with these segments, specifically lifestyle engineering companies and electronics companies, they will be allowed to increase the prices in this tough time. So I’m really not confident about to be like increase the prices by these all know on competition.
Unidentified Participant
So just last question. We generally maintain that we will grow at 1.5 GDP and so do we maintain that or is it something that it’s not in sync at this point for the entire sector, not just for the company where the growth in the GDP is not really reflecting in the growth in the road logistics sector, which could definitely impact us as well. So just that would be my last question. From a longer-term perspective, like two years, how do we see the growth?
Chander Agarwal
Yeah. Well, so this year, this is clearly visible. You see like FTL — FTL industry slightly grow because that government capex happened and that’s why I think they have the slight growth on that, but they also have a very-high pressure on margins, every FTL company. Second yeah. This is like exceptional year in this, which is we stick with that 1.5x kind of ex-growth for the GDP. This year more GDP is coming from service and less from the manufacturing. So we will be stick with that 1.5x times of real GDP growth and this is I think one exceptional year we see.
Unidentified Speaker
Awesome. That’s all from my side. Thank you and all the best, sir.
Chander Agarwal
Thank you, Alo.
Operator
Our next question is going to be from. MR., please go-ahead with your question.
Unidentified Participant
Yeah. Hi, sir. Thanks for the opportunity. Couple of questions from my end. Firstly, sir, you spoke about some improvement on the pricing from Jan. How is the — how is the volume trend like do you see any kind of recovery out here? Also if you can provide the absolute volume number in the quarter, please?
Mukti Lal
In this — very well. So in this quarter, we achieved a volume of 2.4 to — you’re talking about quarter or this month? This quarter, sir in 3Q? Yeah. Q3 we have achieved a volume of 2,42,2 lakhs ton we have taken in our volume in Q3.
Unidentified Participant
Okay. Okay. And how has Jan been, sir? Because you spoke of price hikes and because some of your peers are speaking about price hikes so forth, you should be able to garner that kind of market-share, right? So I’m just trying to understand how the volume growth has been or de-growth, what is the scenario like in Jan.
Chander Agarwal
Honestly speaking, this January is fantastic or you can say that they started a growth. But again, you know we are also worrisome because all-the-time we’ve seen in last 3/4 where you know, good month is not performing well. So we depending upon the March, how March month is playing. So we have taken a growth in January, but we are really not sure, very hard to comment on March, how they’re playing it. So same way like in Q3, we were in a good note on a — start with the October, but finally, December month was, I think you can say is a worse worst perform. So this sense is really hard to say, but yes, we always keeping trying to be hard to get the like volume growth back to normal.
Unidentified Participant
Okay. So what was the price hike that you took in Jan, you spoke about decent amount of price hike. So anything that you would like to quantify approximately?
Chander Agarwal
Sorry, come again. I just missed your last
Unidentified Participant
Sir, I was asking what is the kind of price hike that you took in Jan, you were speaking about that you saw some decent price hikes in the month of Jan. So any quantum that you would like to indicate?
Chander Agarwal
So again, you know SMEs, we are not pressuring for price hikes because again there is still there in a slowdown or muted growth. We now targeting our big customers. So hopefully, I think we will be — in this whole quarter, we will be able to take the 1% price hikes overall basis because 50% is out, then remaining 50% supposing we get from the only 30% plus — 30% customer. So ultimately, it will be converted into almost 100 basis-points.
Unidentified Participant
Sure, sir. Sir, my second question is on the investments that you — that the Board has approved for on the Singapore side, that $7.5 million. I mean, this is roughly about 35%, 40% of your cash balance. So I’m just trying to understand what was the rationale behind this investment and why is the company looking to do it? And the current scenario when the domestic market, there are challenges where you still have to cut-down on the capex. So what was the thought process here if you can help us understand this, please?
Chander Agarwal
Well, so this first — this new capital requirement is for not this year, it is for like ’25, ’26 and ’26, ’27 for the two year. So overall cash-flow will not be more than like in the range of 10% to 15% in each year. Second, our rationale to establish that company to be having like freight forwarding business in to Singapore and inbound and outbound, that will be also help us to be support in Indian business where we can be import the things in India and then can distribute across India as from the Express module model. So we want to be established operation in Singapore, but in a gradual way. So that’s way we will be putting it.
Unidentified Participant
Okay, sir. I mean the — I mean the reason I asked that question is also in the context of the weakness that we are seeing in the domestic market and where we also had to curtail the capex. So it’s somehow, it feels that means what you’re doing perhaps is right, just trying to fit it in the context and why you are — when you had to cut-down on domestic capex, you’re looking at international investment. So that part I was trying to figure out.
Chander Agarwal
No, so basically, we are not curtailed any capex because our capex, why I’m saying our capex is completely depending on the buying of the lands. So we not curtailed any capex. Whatever capex we’re doing, we are doing that, now we already finalized as a contract because after buying a land, we’re taking almost one and a half year to be and everything to finalize everything. So now construction will be start in this quarter only and as I said in Ahmedabad and Kolkata in a big way and both facility put together would be around 5 lakh square feet. So next year, these will be ready by March-end. Our automation will be maximum again March-end or max first-quarter of next year. So everything is planned and it is not on cost of domestic capex to international investment. This is a separate thing, the separate strategy for that.
Unidentified Participant
Okay. So just to understand, does your sister-company TCI have any presence in Singapore or you don’t have any presence over there?
Chander Agarwal
Right. No, they don’t have any presence in Singapore.
Unidentified Participant
Got it, sir. Thank you very much for your patient answers.
Chander Agarwal
Thank you, please.
Operator
Our next question is from Mr Krupan. Please go-ahead with your question.
Unidentified Participant
Yeah. Good evening and thank you for the opportunity. So, sir, my first question would be slightly more on your contribution from SME as well as the large corporates. And one of the reasons why we had a higher preference for SMEs was our margin side, but clearly the operating efficiencies, you know, has been lagging because the volume also has not been contributing to our — to our overall system. So are we relooking at, you know, adding more corporate customers and changing the mix because that can be one lever wherein — which can drive your overall operating efficiency. Any thoughts around that?
Chander Agarwal
Absolutely right. You rightly said. So what we also are stradizing because specifically, if you see on our eastern part of India, there is an SME — eastern part of India or other part like down south and all, there is no manufacturing and we completely depending on SME customers. So this is a dual challenge for us from the eastern part and these part of India where we have the SME presence, they have less volumes. So our returning load is reduced. That’s why my utilization level is 82% right now. So we also like have exactly more focusing on a big customer there wherever we have been really getting good response on that side. So aggressively we’re pushing to be more focused on a big customer rather than SMEs, once this will be normalized, then we will be again take this ratio like 50-50. So absolutely right, we’re doing on a strategy on that way only.
Unidentified Participant
Got it, sir. So second part is primarily on — while I do appreciate that MSMEs are not you know are facing a lot of challenges here. You are supporting the trade at this point. We’re not increasing price hikes or not taking price hikes rather. I just wanted to get a sense, because we are in a hyperinflationary environment, if I were to put it across all cost heads. And tonnage is weaker. So why the hesitation in passing the increase in costs, it’s not that profiting higher just because of — and that’s one of the reasons why we are taking a price hike, right? So we are just offsetting the cost which is there. So just want to get your thoughts as the industry itself, why is it that there is a fair bit of hesitation to take price hikes at this point.
Chander Agarwal
Yeah, well. So these are the SME customer which helped a lot us all-the-time, they support us. Now really they need a support from our side. We have the like relation with them. We had a longstanding relationship of like you know, more than one decade. So we, you know listening them carefully, they help all-the-time. So this time we — or also if you see cost is also manageable. Wherever we did, our costs have just increased by 200 basis-points, which will be normalized once volume will be like back to normal. So there is an — I don’t think so very any worrisome. There will be also support once they will be normalized on their business part. So we’ve really not seen any problem there and we unnecessarily don’t want to be put there more pressure to enhance our profits basically. So this is like give-and-take in our business basically.
Unidentified Participant
Understood. Understood. Lastly, if I may, you know, while you have highlighted that the branch addition is going to be not as aggressive as previously anticipated until traction and growth is visible. Any thoughts around what would be the potential branch addition in FY ’26, ’27, given that you’re adding a lot of capex towards constructing new hubs especially in Ahmedabad and and also you had hubs in and Pune. So just getting a sense of any ND plans around FY ’26, ’27 on branches?
Chander Agarwal
Yes. Well, so basically we opening up the branch to support SME customers because for the big — to customer, we really don’t need the much branch network. So that’s why now SMEs are really in a slightly muted growth. So we decided just like in a on that, not the stop. So next year, again, we will be planning to open a branch in the range of 50 to 75 and in ’26, ’27, again in the range of 75 to 100, that we will be — surely we will be open that branches. More focus like we have the strategy to be open almost 30% to 40% branches to support the multimodal business remaining for the surface business. So this strategy will be go there.
Unidentified Participant
Okay. Okay. Got it. Last question if I may, sir, are you open to sharing the data relating to contribution of new services like the rail and cool chain and extra?
Chander Agarwal
So all put together, services is still stagnant at 17.5% to 17% to 18% and remaining is surface. Another one. And another one aspect also like — would like to mention here earlier, we have the e-commerce share in overall revenue is 4%, now it is also to 2.5% to 3% only because as you’re aware, we are — our focus is not on a B2C. So now a few customers like asking again of again cost price reduction and also we are not going into these things. So our B2C share is also reduced — sitting to 2.5% to 3% from 4% in last year. So that’s also one-off reason to be reduce this volume in this side.
Unidentified Participant
Got it. Yeah. Thank you, sir. That’s it from my side and all the best.
Operator
Submit to ask question, please raise your hands. Our next question is from Mr Rohit. You can go-ahead with your question MR. Rohit, you can go in with your question.
Unidentified Participant
Am I audible now?
Operator
Yes, you are.
Unidentified Participant
Yeah. Hi, sir. Just one question from my side. Of the total revenues, how much will be the retail portion that we have right now.
Chander Agarwal
Right now, so Rohit, right now in nine months, it is ratio is 51, big customer, 49 small customer, but in particular, this Q3 quarter, it is 537.
Unidentified Participant
Sir, I’m speaking about the retail — maybe the lifestyle that you said lifestyle segment.
Chander Agarwal
Okay. Okay, you mentioned that. Yeah, retail. Yeah. So retail is — overall basis is almost around 9% to overall revenue to us. 9%.
Unidentified Participant
Okay. So that’s it from my side. Thank you.
Chander Agarwal
Yeah.
Operator
Next question is from. Please go-ahead with your question.
Unidentified Participant
Yeah. Hi, thanks for taking my question. So I wanted to understand from you, how will this move — this gradual move from road to rail, the implementation slowly of the DFCs impact our financial impact and operationally impact our services business over the long-run.
Chander Agarwal
Yeah. Well, so because rail is not in a really competition with the road, they — whatever they’re building up this freight road — freight corridor. This is meant for to be carrying commodities and like cargo. So they building for that because for the road, it is really can’t be multimode for that. FTL is like, as you are aware, these are like direct from factory to factory. Our business also like door-to-door. So rail can’t be covering that. But tomorrow supposing this is really viable and economically viable to we have the mid-mile through that, is a faster or connections and service loading and loading at platform is really fantastic, then we can be think over to shift our mid-mile. This is very good for the overall industry. So then we will be thinking on that.
Unidentified Participant
Yeah. And yeah, but then — but then this Rail Express vertical of yours, what is what is the exact purpose from which you started that and what are you trying to achieve by blending? I’m assuming you’re blending Surface Express and Rail Express.
Chander Agarwal
There are two different products. Surface, usually the transit time is five to seven days and rail is two to three days. So that’s the difference in the service offering. The pricing is higher for rail, because it’s a faster delivery service. Therefore, there is no overlap between rail and road in the express business for us. And rail also like to mention here, rail is through passenger trains. We are not utilizing this good train.
Unidentified Participant
Yeah, that’s what I was asking. Could you explain the business model of your Rail Express business? That was my question.
Chander Agarwal
Yeah, it is again — it’s a like substitute of air services where they’re giving whatever prices and we’re doing these rail services are like one 25% cost and with the same kind of TAT, where we putting our material into in passenger train and then delivering — so it is also door-to-door service and we’re giving on a similar kind of TAT, which we deliver even competition in air mode with the highest price of like 4x. So this is the model we have. That’s why air — my Rail Express is moving very fast.
Unidentified Participant
Okay, I understood. When you say door-to-door, you mean then so then a truck collects the product from somewhere and then delivers to the customer.
Chander Agarwal
Exactly. It’s a multimodal basically where we work from the customers premise, bring to like platform, put into a train, passenger train and then collect from destination, location and deliver to customers destination, customer’s place. So the whole value-add chain we are giving to them.
Unidentified Participant
Understood. Yeah. Okay, great. Thank you. Thank you.
Operator
Our next question is from Mr Ravi. Please go-ahead with your question Mr Ravi, you can go-ahead with your question
Unidentified Participant
Hello, hello are you listening me?
Chander Agarwal
Yes, Ravi, you are yes.
Unidentified Participant
Okay. I am shareholders in last 10 year and what commentary,, you said before two to three years now business is different what you said earlier, I visited Gurgaon shorting Center to have you any idea such bedtime come to lifeline of country business? And if it comes, when it will be a normal one.
Chander Agarwal
So nice to speak to you again. You know, this year is election year and last year, sorry, what I mean. So the whole of the financial year, there have been elections. So we saw the poor situation of the economy because cash had dried up from — from February — from September of 2023 since the INR2,000 was banned, we saw the economic downturn started happening. Coupled with that was the high-interest rate and the inflation rate. So everything is now subsiding. Elections are over, hopefully now there will be a rate cut. And of course, let us not forget that the global challenges of the three wars that were happening. So all that also came into factor where we started getting affected. The economy — the country started getting affected. You see the situation was so bad that to win the power nothing was being cared about for the businesses or the country. Now that is aside, we have already started seeing growth in the — from January onwards. So going-forward, we are well-poised, well-positioned to handle the growth which will be coming on. Now let us not forget that we have been paying dividends very tactfully and also at the same time, we have been profitable also to the extent that we have not been able — we have not taken a loan till now. So looking at that, I mean a glitch like this is okay. We are able to manage it and sustain it and go-forward.
Mukti Lal
And also to add that, Mr Ravi, basically, we’ve seen this kind of cycle in 2008, 9, that time global slowdown was there. And we’ve seen this kind of problem again in ’14, ’15 before just like on a — before GST time, that time has been run-through by like one and a half year and then again whole industry has come with the next leap of the growth in that. So we hope also like now worse time has gone, tough time has gone and we will be start to moving on a positive side.
Unidentified Participant
Thank you very much for your reply. Okay.
Chander Agarwal
Thank you.
Operator
Our next question is from Mr Jinesh.
Unidentified Participant
Okay. Am I audible?
Operator
Yes, you are.
Unidentified Participant
Yeah. Thanks for the opportunity. Sir, my question is on our volume growth trajectory. Now I think if I remember right in the last call, you had mentioned that our target for FY ’26 is approximately 13% to 15% in terms of volume growth. But given how the performance has been so-far, especially on the SME side where you mentioned that there is a pain which they’re going through. So essentially, how should we look at the next year in terms of volumes? And also if you can call-out any specific sectors that are witnessing more challenges within the universe that you operate? I think you mentioned that retail is at about 9%, but any specific sector which is having a major impact as far as your volume uptick is concerned?
Chander Agarwal
Yeah. So you rightly said. So we’ve taken a target to be grow in the range of value-wise in the range of 12% to 15%. Volume, we will be grow like a — double-digit at least 10% to 12%. So we also intend to be take the price hikes in next year also. So one of that. Second part, you rightly said, so we now think why should we so depend on the SMEs because this is not doing well. So we more aggressively taking the — going for the big customers and we also achieved that result in this January month. So we will be go with that strategy. Third thing, we also like very aggressive to be for the multimodal businesses, wherein rail and air are our forefront for that. So we’re putting high effort for that as well. So margin will be — we — maybe like margin is already like erode on a 300 basis-points. So we’ve not seen any further erosion on that. This is like sustainable margin, whatever we did that. So I have seen — there has been a growth aspiration for the next FY ’26 we will be achieved in time to come? Yeah.
Unidentified Participant
Sure. And sir, I’m a bit new to the industry. So this question might sound a bit basic or silly in nature. But just wanted — but just wanted to understand the overall universe, I mean, given the challenges that we are facing, how are the other competitors doing? I mean, are we holding on to our volume market-share when we say that we are at about 242,000 tonnes. So are we holding on to our volume market-share or are we seeing volumes shift across the competitors? And what is the overall universe in terms of total volumes and what kind of growth or rather degrowth one has witnessed in that universe, say, in the last couple of years? And how do you see the overall demand scenario shape up for the next year?
Chander Agarwal
Yeah. Well, so if you see other industry player where FTL and LTL, they’re slightly in a growth because this market is very fragmented and they can be get the FTL movement from the unorganized player very well, very easily, but must be compromised on a margin level. But if you see the express industries that are working in a different way where we catering to B2B customer. So our challenge, we can’t be compromised on a service-level. FTL industry, LTL industry can be compromised on a service-level, because we are as a premium service provider, we can’t be compromised on a service-level. This is one aspect where we once volume will be back, then we will be normalize our margin level. Second, new industry, we also targeting like-new bathware, kitchenware, home furnacing, these are the new industry where people like buying and we giving and we also putting very-high emphasis on that to be adding these customers. So we’re doing that. Third, we also changing slightly our aggressive strategy to be focusing more big customer than SME customer because SME, I think that will be — maybe go like again for the three or six months, maybe have the pen depending upon the how like RBI may be cut under rate or inflation plays. And so this all depending on the various thing, but we clearly intend to be keep ready for the FY ’26 to achieve like 10% to 12% in a volume growth.
Unidentified Participant
Okay. Thank you. Thank you so much.
Chander Agarwal
So we can have more one or two questions than we will need to close that.
Operator
Okay. Our next question is from Ms Ashay. Please go-ahead with your question.
Unidentified Participant
Yeah, good evening, team. Thank you for the opportunity. Sir, just two questions. First, did I hear you right in terms of your multimodal revenue mix is about, 17% 18%. And what kind of contribution are we looking at over next two years or three years?
Chander Agarwal
Yeah. So we are planning to be have 22% at least in the next three year-after three year means. So each year we want to be enhanced with the growth of like faster growth in multimodal means because they are a very niche segment in air and rail. So we have — want to be at least 1.5% each year. So by after completing three year, we want to be that share in 22%.
Unidentified Participant
And that comes at a superior margin to current level or similar level of margin.
Chander Agarwal
So these slightly superior margin in AIR and Rail Express?
Unidentified Participant
Understood. And when you — when you’re looking at a double-digit volume growth, which are the two or three sectors you think will drive that growth? And secondly, you know, as you said, you obviously going to focus a bit more on the corporate side, which will be at a lower-margin. So what’s the typical margin difference between the two in terms of — you know between corporate and the SME?
Chander Agarwal
No, so basically, it will not impact my margins, rather it will be improved because now the matter is to fill factor of my truck has to be improved on those routes where we really have the low volumes. So it’s really help to improve the margin even not reduce the margin. And this ratio is also not bigger one, like we just looking for the 2% or 3% kind of change in that ratio. So ultimately, it will be again we all said all-the-time saying, big customer giving the volumes and small customer giving the prices. So this time we really need the volume. So that’s why we catering that and once normal time will become, then we will be more aggressive to get the business from this SMEs and correct this ratio again in the range of like again 50% SME, 50% big customer. So that’s a strategy we want to be adopt, specifically on written loads where we have like emptiness in the truck. So we want to be fill-up because as I said, we can’t be compromised at all on a service-level. This is the fortunately, unfortunately in good time is a good thing where we have a higher-volume and good margin. But in like this low time, we have faced the challenges of like vacancy and it is like direct cost to us. Tomorrow supporting my volume increase that completely will be very, very fast will be improve my margin level of 200 basis-points. Once fill factor improved by 2%. So this is directly linked with the service levels and volumes.
Unidentified Participant
So in a sense, if I understand right, essentially what is happening is that your — because of the weak volumes, there is an underutilization of the fleet. So fill factor is lower.
Chander Agarwal
Yes,
Unidentified Participant
Some sense in terms of how it has trended in 1Q, 2Q and 3Q? Has it gone down materially? Has it remained stable?
Chander Agarwal
So is almost we — highest we achieve in a 1/4 where we highest-volume is around 84.5%. In this year, we achieved 82%. So volume — this vacancy level is around — this reduced by almost 2%.
Unidentified Participant
Okay. And is it any particular lag sector region, it is acute and which is — which even though the overall number may not look that low, it has a disproportionate impact on the margins.
Chander Agarwal
So slightly decrease, as I said, SMEs is slightly weaker, so we’re getting impacted through like Eastern side from Eastern to across India and down south to across India. These two sectors where we’re depending on majorly on SMEs, that’s impacted.
Unidentified Participant
Understood. That’s very helpful. Thank you and wish you all the best.
Chander Agarwal
Thank you, please.
Operator
Our last question is from Vikas. MR. Vikas, go-ahead with your question.
Unidentified Participant
Good evening. Sir, my question is as we are planning some international services already we are having, but offices in international locations like Singapore, what can we expect in next three to five years spend contribution from international services and especially the network, how many countries we will be doing, which type of services LCL, FCL or only air cargo? And second question is on the automation. We have done two hubs automation. Finally, now all the teething these problems must be over. What’s the impact of the automation on opex and operational efficiency?
Chander Agarwal
Yeah, Vikas. So basically, international side is really very hard to say on the numbers. We are not diverse, we will be can answer on a one-to-one basis. But basic idea because we already have the network across India through Agent Network. So we don’t have any further office opening in worldwide. We will keep the office in Singapore only, but we do the work we will want to be a hub there, so we can be due from the Singapore in and out. Second part on automation side, we, as already mentioned, there is an efficiency improvement a lot in these two center where we reduced our ton of — this time to be process the cargo in these two hubs, those two settings — sorting centers. So ultimately, we reduced the cost by like 30 basis-points 50 basis-points put together in these two centers in overall basis. So we will be keep adding the shorting automation in the new center wherever we’re building up. Like as mentioned, Kolkata and Ahmedabad will be the next one, followed by Chennai and Mumbai. So we will be going-in by data strategies.
Unidentified Participant
Thank you.
Chander Agarwal
Thank you.
Operator
So with this we end our question-and-answer session Mr MR. Muttilal, would you like to have ending statements?
Mukti Lal
Yes, Mr Chandhar will.
Chander Agarwal
So I must thank everyone for participating the TCI Express con-call for Q3 financial year ’25. To summarize, despite the evolving macroeconomic landscape and sectoral challenges, TCI Express has continued to demonstrate resilience, adaptability and strong commitment to operational excellence. As we move forward, we remain optimistic about the long-term potential of the logistics sector and the express industry, supported by favorable policy initiatives, infrastructure development and growing demand for Express transportation solutions. We are confident that our asset-light model, disciplined financial management and customer-centric approach will continue to drive value for our stakeholders. And with that, I must thank you.
Mohit Lohia
Thank you, please. Yeah. I would like to thank management once again for providing us the opportunity to host this call. On behalf of ICIC Securities, that concludes this conference. Thank you for joining us and you may now disconnect your line.
Chander Agarwal
Thanks a lot, lot please.