Transport Corporation of India Ltd (NSE: TCI) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Unidentified Speaker
Vineet Agarwal — Managing Director
Analysts:
Unidentified Participant
Presentation:
operator
Good evening ladies and gentlemen. We will begin with the session in a while. This meeting is being recorded. The recording has stopped. Hello. Ashish, let’s start. This meeting is being recorded. What happened? Ashish?
Unidentified Speaker
Let’s start. There is some problem in the mic. We just fixing it.
Unidentified Speaker
Good evening ladies and gentlemen. I think she will take some time is again the problem. So thank you very much all participants for joining us today for quarter three nine months investor call. I hope that you would have got a copy of investor presentation. It is also available on our website. Before we begin with I would like to have a disclaimer that some of the statements and discussions we would have probably on a forward looking and we just. They may not be coincide with the actual results. Now I will invite Mr. Vineet Agarwal Managing Director TCI for his opening remarks and then followed by the investor pendition.
Over to you sir. Thank you. Ashish, can you put up the presentation?
Vineet Agarwal — Managing Director
Yeah. Good evening ladies and gentlemen and thank you for joining us on quarter three call. Sorry for the delay. I think some technical glitches but nevertheless just to start I think we had a moderate quarter as was expected though some volume pickup was there across the system because of the GST changes that happened in September end. I think some of that carried forward to the third quarter as well. So I in. I would. I think many of you are already aware of the company so I would not get into specific details for at the quarter level.
So I’ll just skip to the next slides please. Yeah, I think you’re well aware of the industry developments as well as company we have. We offer a wide range of solutions with a strong multimodal network. I think all these things are helping us as we speak. Even with the budget we’ve seen that the. The infrastructure focus of the government for the last two years, three years is tremendous for the logistics sector. There’s also coastal shipping that has been specifically mentioned in the budget which is essentially increasing the share from 6 to 12% in 20 years from now.
But that is also would mean that it will give a flip to the logistics industry as a whole and specifically for us because we are well positioned in that the company offers a very wide range of services under a single window. Next slide please. And focused on very large and diverse kind of industries areas where we see high potential. Also on the right hand side where there is growth momentum across various levels in. In the. In these diverse industries. Again the TCI advantages of a single windows solution, operating cost efficiencies and some levels of economies of scale.
But bespoke services is something that we are seeing is really working for many of our clients of course in the guise of B scope. It is also standardized solutions but it is also there is a level of customization that happens for our clients From a multimodal perspective. We’ve been growing quite rapidly. Interesting developments on the rig side is that we did 2133 rigs in the nine months compared to 2500 in the full year last year. So there has been a substantial jump in the rail movement in terms of container handle also we had about 121,000 in nine months versus 154k last year.
As well as cars handled also we’ve almost reached the same level as we did in the full year last year. So net net the volume increase has been there across the system and we are also this, this focus on multimodal is helping us to drive volumes but also shift towards GHG reducing GHG emissions and we’ve saved about 140,000 tons of carbon. I wouldn’t mention much about it but you know technology is a very base for us going forward. Next slide please. We’re present across the some of the very high growth sectors as we are seeing now and the linkages for us because many of these customers might start with one type of product and then we can move to other solutions.
Also in terms of the numbers now we’ve had 20 sec 22 consecutive quarters of Y on Y growth and the company with it’s we have about 250 odd crores of cash and I think the whole idea around diversification of our businesses is helping us to ensure this growth trajectory. Now I’ll talk about the freight business. As we know that phrase business has been going through some challenges and the numbers are reflecting that. We expect another one or two quarters more of this challenges and then things should start looking up. We have also reversed the trend in terms of LTL to FTL and the number is starting to creep up.
So margins are flat and slightly lower but the trends are looking to be better in the next two quarters. So we are quite hopeful that this will start in terms of some of the changes that we have made in the system. We should start reflecting in the numbers going forward. The ROCs are compressed also clearly because the margins working. Capital is a little on the tighter side there as receivables are slightly tighter from on the FTL side. Supply chain solutions has done well in the quarter. We have grown at about 15% on the top line.
Margins are a little bit on the flat head side because of essentially the investments that we are making in the business not only on the capex side but also on the OPEX side with creating bench strength etc. For several new contracts that are in the pipeline. So some of the contracts have started but you know have not come to the full stream and hence we’ve not got the results of that entirely. So margins are slightly lower compared to comparatively but usually Q4 is when we see slight improvement in margins also. So it should bring other ROCs back to the 20 plus percent range.
We are seeing good traction continuing. We are have solid pipelines in place in terms of growth opportunities and the specifically in the warehousing space. We segments like fmcg, Quick Commerce etc have all picked up in this last quarter also because of the GST cut but most importantly automotive sector is doing very very well on the CVS side. Things remain good with the fuel prices being on the lower side until the end of quarter. However we expect expecting now fuel prices to be slightly higher in Q4. Not a major impact on the company per se but we see that top line should as over the nine months has been flat would continue to remain flat or slightly higher margins remain in this 40 45% range of course slightly better in the last quarter also but again this is seasonal some amount of seasonality.
All our ships that were under dry dock have all come back and two are scheduled for FY27. This continues to do well for us and we expect the margin structure to be the same for the coming quarter as well. When we come to the joint ventures the joint ventures have done reasonably well. Concord growing at 20 plus percent, cold chain at about 17% and transystem at about 12%. The margins are slightly tight on each of the businesses but again you know that’s a function of the competitive pressure that almost all businesses are facing at this point in time across the board and but the shift in terms of as we’ve been always saying that overall growth trajectory comes from the not just the divisions by itself by themselves but also by the joint ventures and the subsidiaries that we have.
Consol growth is about 9% on the top line about roughly about 12% on the bottom line for the nine months quarters have been slightly better. Again dividend income that came in through because of the joint venture in this quarter has also helped. The guidance that we kept of 10 to 12% we should be able to get to on a console level and on the 15% odd on the bottom line at the console level should also be Achievable. Not many, not very significant changes in terms of the numbers or the ratios. I think all of them are almost at the same level.
We did a little bit of a bump up in terms of the dividend payout ratios about 15% currently and as in, sorry the percentage was a little higher but the payout is the same in terms of the overall payout to profits. ESG goals. Again we are very focused on that using green trucking, using renewable energy wherever possible and of course shifting our customers to multimodal as much as possible. Some case studies etc, some of these you can scan and you can see. We have a lot of information on us, on many of our publications, etc.
Outlook remains positive. Q4 remains positive. Some of the trends in terms of stocking is continuing. From an auto perspective, of course things are not as robust as it was in September, October and even a little bit November. But still there is movement and across the board whether it is two wheeler, three wheeler, four wheeler, commercial vehicle, tractors, earth moving equipment, we are seeing some movement in all these segments. Overall in terms of capex the budget was for about 450 crores. I think we’ve reached about 266 crores. We should get to between 350 and 375 crores for this fiscal and we’re looking at similar kind of budget for the next year also.
We’re very happy to answer any questions you have. Thank you.
Questions and Answers:
operator
This ins the presentation I would request to raise your hand and just tell your name and from where you are if you can like continue it if you have fixed the the mic problem.
Unidentified Participant
Yes sir. Am I audible to everyone?
Vineet Agarwal
Yes, please go ahead.
Unidentified Participant
Okay, thank you sir for sharing your valuable insights. Ladies and gentlemen, we will now begin with the question and answer session. If you have any question please use the raise hand feature when called on. Please start by your stating your name and organization before asking any question. We have Mr. Kripa Shankar with us sir, please go ahead.
Unidentified Participant
Hi, good afternoon and thank you for the opportunity here from Spark. Couple of questions Vineeth on first on the CVS business just wanted to get a sense on the margins side of things. The expansion is quite good and just wanted to see the momentum which can continue in the coming quarter as well. And while in the press conference rather than the media coverage you had mentioned that it will drop in the next year. Any specific reasons why you believe there will be a very steep decline?
Vineet Agarwal
I’m not saying there’s going to be a sleep decline but I think it could be Just. Just the fact that there is. I think the. One is the fuel prices should go up would go up a bit. Secondly, I think there could be increased competitive pressure. Third is that new ships will start coming in in FY27 so there’ll be higher depreciation and interest on those as well. So those all will add to some amount of margin compression. But again you know the range is still quite decent. So I’ve been maintaining that anything above 25 30% is good.
So I think we’ll still remain at 30ish percent even after that.
Unidentified Participant
Got it. And. And for 4Cube do you do expect that the margin will be similar to 3Q levels?
Vineet Agarwal
Can’t say for Q4 entirely but you know the. All the ships are in play right now so it should continue to help. But. But I would not really say that entirely on Q3 levels. But. But yeah I think perhaps closer to that.
Unidentified Participant
Got it. Second question more or less was on supply chain business. While we have seen a very strong momentum with respect to automotive segment. Just want to get a sense around the growth engine. You had indicated in the previous calls also that you were. You were getting more orders from E Commerce. So just wanted to get a sense that are you expecting sort of a 15 to 20% growth going ahead given the momentum and the auto cycle in favor? Is that something which is a expectation, a conservative expectation?
Unidentified Speaker
Well not a conservative expectation. I mean we are quite confident about the 15% range plus minus a few percentage points for growth in the next fiscal. Also for fi. For supply chain. I think the. Not just the automotive but the other areas as you mentioned are also picking up quite rapidly. So that will continue. And we are also gathering more market share from our competitors because we have this holistic solution of road plus rail and using yards etc across the country. So net. Net. I think it’s. We should be able to maintain this 15%.
Unidentified Participant
Got it. Lastly, just wanted to get a sense there are two new rig additions coming in next year. When are they expected?
Unidentified Participant
I think closer to the end of the calendar year if I’m not mistaken.
Unidentified Participant
Got it. So most of the benefits would come in from FY28 onwards on that.
Unidentified Participant
Yes. Thank you. That’s it from my side.
Vineet Agarwal
But you look actually speaking the benefits are more strategic rather than monetary to that extent because we are already hiring a lot of rakes from the government, from the railways on a regular basis. So we own only three rakes right now. But the number of trips we are doing is in the excess of 500 per month per Quarter. So essentially they’re all coming from the Indian Railways. The other wagons that they have. So by having these two additional rakes would be firstly they were looking at a new model where we can actually carry more vehicles on it at a double deck level.
Secondly, they would just be strategic for some customers where we are able to provide them capacity and service when the Indian Railways are not able to. So they, they will not have a specific large monetary impact.
Unidentified Participant
Got it. Thank you for answering my questions.
Vineet Agarwal
Thank you.
operator
Thank you. Sir, we have the next question from Mr. Sunil Kothari so please go ahead.
Unidentified Participant
Thank you. Thanks for opportunity. Sunil Kuttai from Unique PMS sir, you mentioned in your opening remarks about the next one or two more quarters of challenging freight division and also you mentioned about the competition in the all the JV related businesses. So if you can little bit explain in detail how is the competition from where are those competition coming in and how prepared we are to overcome those competition and coming back to a respectable profitability. So competition pressure is not just in the JV but across the board. I would say that, you know, whether it is freight supply chain, sea waste, cold chain, railways, everywhere there’s competitive pressure.
I think India being an attractive destination for companies. So we are seeing that the investment also is increasing into capacity building or just essentially looking at logistics as an attractive field, whether it is not just by domestic companies but also by overseas companies. So there is competitive pressure across the board and it will continue to remain. We as a company are continuing to diversify into new value added areas, niche areas where we are able to protect our margins better and also provide services which are more wide ranging so that you know, if one service we’re not able to make as much money, we are able to do it in different areas, different segments.
So that’s the general comment on the freight side. Yes. The challenge is essentially how we are able to rework our existing structure and we are working on some ideas there as well as we’ve implemented some things. But since we were at a, at a, you know, I would say a cycle for us which has not worked positively, that cycle has to complete completely. Still we don’t hit the positives. More and more positive. So some of that is internal, some of that is external with the MSME sector still being slightly on the weaker side. So all of those particular improvements in the next two, three quarters is when we’ll see growth coming back to this business.
Specifically on this Trans Systems JV because it has a very sizable contribution to our consolidated numbers that Profit, profit is substantially down. So any specific reason, would you like to comment on this?
Vineet Agarwal
No, it’s not substantially down, slightly down but I think we are, as I said, you know there are customers challenges sometimes or the other. So I think. And it’s also on a growth phase that particular company. So these are normal, a little bit plus and minus, but net, net I think for the full year we should be close to last year’s profit levels.
Thank you very much. Thank you. Thank you.
operator
Thank you sir. Dear sirs, we have no, no raised hand as of now. We can wait for a while.
Unidentified Speaker
Yeah, sure.
operator
Mr. Deepak is with us. Please, please put up your question.
Unidentified Participant
Yes. Hi Vineet and hi Ashish, this is Deepak from Unifi Capital. Sir, firstly I’ll just go segment by segment on the freight division. We’re seeing that despite you taking a lot of efforts on branch addition and pulling up your FTL mix, the growth and margin seems to be suffering. So anything more that you guys need to do internally to beef up the growth and the margin profile and what gives you the confidence that after two quarters the revival would happen in the freight division? Firstly?
Vineet Agarwal
Yeah, well you know, I think some of the network expansion and some of those other things have to continue because those are more long term measures rather than short term. So of course that’s one side. The second is I think the market, overall market is on the weaker side. So that we are hoping will start improving now with this GST cartel sector because that’s a little bit more of a trickle down effect that happens with, with the MSME sector. The third is we also made some management changes there. I think that should also start having an impact in the next quarter or so.
So, so all of these things are work in progress and gives us more confidence for the next two quarters. Understood.
Vineet Agarwal
So given that the competition is quite high in that space, do you, do you think that you need to change your strategy to you know, maybe discount and get volumes or you know, is there any strategic shift that you’re thinking about to revive the growth in this segment?
Unidentified Speaker
I wouldn’t get into very detailed operational systems here but I think essentially we are looking at all kinds of, we have looked at different kinds of models etc, we know that discounting doesn’t work in this highly fragmented business because then you’re basically at a, you know, at a falling cost, falling revenue model where everyone is trying to reach race to the bottom. So, so that doesn’t work too much and also you’re working on anyways, working on thin Margins So if it becomes even more thinner, then you can get into deeper trouble. So that balance is critical and that’s where we are trying to ensure that we are able to manage it.
But you know, two years ago this division was doing extremely well. I think you can see in 23, 24 also we had 20% kind of return on capital and year before that was 27%. So this is a cycle, I think three year cycle that we get in freight which, which is now coming fully to an end. And as well as now we’ll see the positive momentum.
Unidentified Participant
Okay, understood, sir. Going to the Seaways segment, we’ve seen very good margins and you’ve indicated that most of it should continue in Q4. But you know, going back to the media interaction that you had today, the 30% margin that you indicated, are we going to see that number coming as soon as say Q1, Q2 or that shift, that gradual shift to 30% margin would be over time, like say around Q3, Q4 type.
Unidentified Speaker
So it’s 30 to 40% is what I indicated. And that’s what will come over time in, not in Q1 so fast, but over the year because as I said, the new ships will get added on depreciation, interest, etc. And a few months that it’ll take for the ships to be fully utilized and come at full capacity and utilization. So, so yeah, so that’s the idea was not specifically for any quarter but for the full FY27.
Unidentified Participant
Okay, and this, the 30% you meant was a bit margin, right?
Vineet Agarwal
Yes, correct.
Unidentified Participant
Correct.
Unidentified Participant
Yes. Okay, understood. And sir, has there been any delay in the ships that we have ordered? Because we were expecting them to come by August around and now you’re expecting them further later. So is there not.
Vineet Agarwal
No, no, not really. Just one, one or two months plus minus based on the schedules of ship making there. So we’ve always indicated really close to Q3, FY27. So that’s what, September, you know, plus minus.
Unidentified Participant
Sure. Okay. And so lastly on your, on your supply chain business, you know, the growth rate on the top line has been good, but margins have been coming off and you’ve indicated that you’re increasing your branch, your brain or your, your branch strength.
Vineet Agarwal
So more like strength, not branch strength. Because what we are doing essentially here is that we are adding capacity from people and systems and processes as well as some of the warehouses for example, would have started in the end of the quarter or we don’t have the full capacity utilization there. So I think those factors really play out in terms of initial investments that we are making into the business before the results start coming in fully.
Unidentified Participant
Okay. My question was, sir, when should this entire cycle end? And the EBIT growth would also mirror revenue growth. When should that phase start for us?
Vineet Agarwal
So we are at, you know, in terms of the percentages, we’ll see some and up and down. We’ve always said that the margin structure is here as at 10%, 9 to 10% plus, minus a few basis points. So we are, I think some years you get a good year because you can kick in some economies of scale. And some years are investment years like this year, where your margin gets compressed a bit, but then they start taking off over the year. So I would think that we’ll possibly see some definitive growth in Q4 because it’s a good quarter.
But going forward is the EBITDA margin at 9 and a half to 10 and a half percent range is what we expect for this business.
Unidentified Participant
I see. Okay, so got it. And so overall you’ve done well in FY27 despite, you know, your ships going for dry dock and challenging times in freight, thanks to good margins in the cvs. But since these. And dividend income. Yeah. So sir, my question was that since these margins would come off in 27, so how should you, how should we look at, you know, the overall company’s earnings growth in 20, in, in the next year given that the CV’s margin would come off.
Vineet Agarwal
So, so the margin will not necessarily come off to a great extent that I have also indicated that. Secondly, I think if as the division, the JVs continue to do well, we should continue to get the dividend income. Thirdly, the other businesses will start picking up. So, you know, supply chain will start picking up, freight will pick up. So that will also add positively to the margin. So overall, I think, you know, the consistency that we have in our biodiversified operations is what has helped the company where, you know, we have had a few years ago when the CWS business was not doing too well, then freight and supply chain was doing well and then supply chain was not doing well one year when few years when freight was doing well.
So, you know, the balance that we are getting because of the multiple divisions is what helps the overall growth of the company. So I think holistically, when you look at the company, this is what is working in our favor in terms of our strategy.
Unidentified Participant
Understood. And sir, you mentioned that Transystem JV would come back to the whole year’s profitability in Q4. So which means that Q4 should be exiting on a high run rate. Should we expect that Q4 run rate and the growth that we’re seeing this quarter to maintain in the next year and we get to about 8 to 10% growth in that business as well.
Vineet Agarwal
So there we, I, I’m not, I don’t think we’ll get to the full year growth as I said perhaps full year margins of last year I think it’ll be perhaps lower than that. Slightly lower than that but not having a major impact growth for next year. I think yes we can take a 10 plus percent range. There is a lot of cross badging that is happening between Toyota and Maruti so that should help sales. They’re also building a new plant in, in the west in Aurangabad so there’s a large opportunity that will play out in 28 onwards.
So there onwards we should see volume increase but as, as we speak you know is business as usual there. So Toyota continues to do well as a company and so will the jv.
Unidentified Participant
Thank you. Thank you sir.
operator
Thank you sir. The next question is from Mr. Druvin so please go ahead. Mr. Druvin.
Unidentified Participant
Hello, can you hear me?
operator
Yes, yes sir.
Unidentified Participant
Yeah, thank you for the opportunity sir. Actually most of my questions have been asked like answered by you because of the previous speaker’s doubt. Just a couple of follow up questions from my side. One would be about our CapEx schedule. Like we definitely have a broad plan for FY26. Would you care to elaborate a little bit spilling over to FY2728 as to the commencement and how much are we like looking to invest that way?
Vineet Agarwal
I didn’t exactly means.
Unidentified Participant
So we’ve in our PPD we’ve given a broad plan as to how FY26 capex is going to be scheduled out moving over to FY20 by 27 or 28. Can we have like some overview as to what will be the Capex amount in those years?
Vineet Agarwal
That year FY27 we don’t have a, we don’t have the exact numbers but the ship is going to complete the two ships that we’ve ordered they’re going to come in, we will make the full payments for those ships. So that itself will be about 200 odd crores and apart from that the regular investments in warehouses, trucks, rakes etc will continue. So we expect the budget to be closer to 450 to 500 around the same range this year as I said we’ll probably end at 350, 375 but yeah so it will be higher in the next financial year.
And the revenue and profit growth outlook that we see in the same slide, the 10 to 12% that is as of 26 that we have been targeting. Not come out with the guidance for 12 for FY27.
Unidentified Participant
All right, and in each of the segments, is there going to be one particular segment where we expect like a turnaround in terms of, let’s say, margins or revenue?
Vineet Agarwal
No, no specific turnaround. I think, you know, our businesses go around gradual shifts, not dramatic shifts. And so I think gradually we’ll see improvement in all the businesses. In the businesses that are a little bit on the lower end.
Unidentified Participant
All right, so that’s all from my side. Thank you so much.
operator
Thank you.
Unidentified Participant
Thank you, sir.
operator
Any other question?
Unidentified Participant
Yeah, can I ask one more question?
Vineet Agarwal
Yeah, sure.
Unidentified Participant
Yeah. So thank you. I just wanted to touch upon the competition in all three segments from the freight to seaways. You know, how do you see the competition panning out and is it easing? Because the growth in the sector and the economy is on the recovery phase and coming back. So if you can just highlight on the competition part.
Vineet Agarwal
Competition remains intense. I think across, as I said, in the freight business, there is also not just the regular competition from the regional players, but sometimes you see some of the express guys also moving towards the LTL business with their pricing strategy. Then FTL has always been competitive, not just from local players, but also from larger national players. On the supply chain side, we have a few companies that are there, but there are of course several regional players, several local players who are dominant in some areas with some automotive companies also. So they keep expanding, also keep pushing the envelope there.
We also see some international players coming in more and more because with the international contracts that they have on the seaway side, there is some amount of competition on the western coast, eastern coast. We have some companies that are, I guess, you know, to some extent seeing the kind of work that is happening on the coastal side. Some of the. The growth that our business has seen, I think that is also attracting some customers, some competitors there. So lesser pressure from, I think in terms of intensity of competitive pressure between the three segments would be the highest in freight than supply chain and then serials.
Unidentified Participant
Understood. Got it. Thank you, sir.
Vineet Agarwal
Thank you. Thank you.
operator
Thank you, sir. Dear participants, the floor is open for questions. You may put up your questions.
Vineet Agarwal
Hello. Hope I am audible. Yes, sir. Yeah, okay, good.
Unidentified Participant
Just on clarification. So Q3, we had one dry rocking in seaweed and despite that, numbers were quite good. Is that right? And depending on Q4 there won’t be any dry docking.
Vineet Agarwal
Yes, that’s correct. Oh, there was one drag off during quarter three.
Unidentified Participant
Understood. And any idea if you look at from December to currently, what kind of increase is there in bunker price?
Vineet Agarwal
Bunker prices are as we shown a graph for quarter and the nine months there is a kind of difference of 17 to 18%. So rates are softer by 18% from last year levels.
Unidentified Participant
Okay, but from December to February, how is there any significant improvement or they are still at a rate bound level?
Vineet Agarwal
They are still at like the same same level from that point of time.
Unidentified Participant
Okay, understood. Yeah, I think that was the. From my side. Thank you.
Vineet Agarwal
Thank you.
operator
Thank you sir.
Unidentified Speaker
So I think there is no further question. Thank you so much all participants taking out the time and for this investor call. If you have any further question, probably you can write me back or you can call me as always. So now we come to into this call. Thank you so much and wish you all happy festival and we will meet in quarter four. Thank you.
Vineet Agarwal
Take care. Bye.
operator
Thank you. The recording has stopped.