- 19 May 2023
- ICICI Securities
TCI SEAWAYS DISAPPOINTS, FREIGHT, SCM BEAT PERFORMANCE ESTIMATES
TCI - 1118 Change: 5.40 (0.49 %)News: TCI's standalone revenues grew 11% YoY to Rs 890 crore. Freight and SCM segment reported strong growth YoY i.e. up 8%/29% to Rs 423/Rs 332 crore, respectively, while seaways de-grew 5% to Rs152 crore. Blended EBITDA margins contracted 247 bps YoY to 11.9%, and came in below I-direct estimate of 12.5% (gross margins at 21.2% vs. estimated 21.4%). The resultant EBITDA de-grew 8% to Rs 105 crore, and came below I-direct estimate of Rs 113 crore. However, PAT remained flattish at Rs 74 crore and came in below I-direct estimate of Rs 79 crore, led by lower other income vs. estimates.
Views: Lower utilisation of seaways impacted absolute EBITDA numbers and negated gains by Freight and SCM division. The company has received approval from the shareholders to raise |200 crore as debt in FY24. Further commentary on additional ship acquisition would be key trigger for the stock. Although FY24 is expected to show moderation in growth as seaways is already seeing peak asset utilisation (delay in acquisition of ship to H1FY24), normalised base in freight, SCM segment, the management expects to maintain current margins, with a controlled cost structure.
Impact: Neutral