- 31 Oct 2022
- ICICIdirect Research
TCI REPORTS MIXED SET OF NUMBERS IN Q2FY23
TCI - 1085 Change: -1.60 (-0.15 %)News:
Transport Corporation of India (TCI) reported a mixed set of numbers in Q2FY23. While revenues beat I-direct estimates (by 6%), EBITDA and PAT were lower than I-direct estimates (by 12% and 18% respectively). The profitability was largely impacted due to changes in segmental EBIT mix (seaways de-grew from 55-60% of the EBIT mix to 43% in Q2FY23). Standalone revenues grew 16% YoY to Rs 851 crore (I-direct estimate: Rs 807 crore). Freight and SCM segment reported strong growth YoY (up 16% and 27% YoY to Rs 394 crore and Rs 343 crore respectively), while seaways division de-grew 8% to Rs124 crore. Blended EBITDA margins contracted 265 bps YoY to 10.8% (I-direct estimate of 12.9%) mainly due to lower gross margins (contracted 140 bps to 20.1%). The resultant EBITDA de-grew 7% YoY to Rs 92 crore, and came in below I-direct estimate of Rs 104 crore. Further, PAT de-grew 16% to Rs 57 crore and came below I-direct estimate of Rs 70 crore, mainly due to weak operational performance
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The contraction in blended margins is due to 1120 bps YoY contraction in Seaways EBIT margins to 24.5%, while Freight and SCM saw 50 bps and 100 bps expansion in EBIT margins to 4% and 6.4%, respectively. Hence, EBIT mix saw change from 17:20:60 (Fr:Sc:Sh) to 22:31:43 ratio. Although profitability has been impacted in the near term, EBIT mix change w.r.t. LTL (Freight) and SCM division is positive in the long term for the company, as the margins are much more sustainable, higher certainty of CF and customers are sticky
Impact:
Neutral