EIC Investment Analysis: TCI Express, a Leading B2B Logistics Company |Worth Investing?

EIC Investment Analysis: TCI Express, a Leading B2B Logistics Company |Worth Investing?

"We are not a SEBI registered advisor, and this should be considered as a research case study only."


I studied in a Vernacular medium school in a village, and my proficiency in English was not very strong. The terms "Logistics sector" and "Supply chains" used to be some hi-fi complex concepts for me.  I couldn't understand their meaning earlier, even though I encountered them frequently and with a fear of exposing my bad English, I couldn't ask anyone either. However, I  understood their meaning at some point, and then I realized, "Oh, shoot!" These concepts were so simple, I had seen and known them since childhood, and without them, a society can't function. I mean, who hasn't seen a bullock cart or a milkman?

What is a Logistic Sector?

Let's take a moment and imagine you're a kid and you have a favourite toy that you want to share with your best friend who lives far away. How will your toy reach them? This is where the Logistics sector comes into play. The Logistics sector is responsible for transporting goods from one place to another using various means such as trucks, ships, aeroplanes, and other modes of transportation. The entire process, from manufacturing the toy to packaging it, loading it onto trucks, and delivering it to the customer, is known as the supply chain.

Today, we dive into an exciting investment opportunity in the logistics sector – TCI Express. As the leader in B2B express delivery in India, they specialize in fast and efficient delivery of goods. With a primary focus on serving Small and Medium Enterprises (SMEs)(50% of revenue comes from SMEs), they also cater to industries such as Auto, Pharma, Engineering, and more.

Key Points about TCI-Express

  • The unique asset-light model and automated sorting centres have significantly improved cost efficiency.
  • Capital expenditure (Capex) of 500 Crore in FY23-28.
  • Strong and growing positive cash flows.
  • Available at a very discounted price. Stock is in a very strong Support Zone.
  • The Road Express industry, responsible for TCIExp's 86% of revenue, is expected to grow at a rate of nearly 15% YOY.
  • A significant market share (90%) remains untapped in the unorganized road express market.
Navigating Turbulent Waters with Resilience

In 2022, most logistics companies struggled due to economic turmoil and fuel price hikes in India. However, TCI Express stood strong, witnessing growth in both sales and profits.

How did they achieve this remarkable feat? Let's explore in the upcoming "company analysis" section of this article.

The Right Time for Investment?

TCI Express, along with other logistics majors like Blue Dart and Allcargo, has experienced significant declines in their stock prices. With TCI Express falling almost 45% from its peak, many investors wonder if it's the right time to invest. Before making a decision, let's analyze the fundamentals using our "E-I-C-T" technique to determine the viability of this investment.

Economic Analysis: Unveiling the Potential

The Indian government has prioritized infrastructure improvements to reduce logistics costs, currently accounting for 14% of GDP. With the aim of reaching logistics costs levels similar to countries like the USA and China (around 8-9%), the future of the logistics industry appears promising.To start our economic analysis on a positive note, let's delve into the encouraging developments first.

Tailwinds: Setting the Stage for Growth:-

Falling Fuel Price:-Recent months have witnessed a stabilization in oil prices, bringing relief to logistic companies. This development positively impacts TCI Express, with nearly 86% of its revenue generated from the "surface express" segment that relies on diesel as fuel.

Growth of E-commerce export space- The booming e-commerce export market acts as a significant driver for logistic companies in India, including TCI Express.  TCI Express plays a vital role in facilitating the export of goods for Small and Medium Enterprises through its efficient express delivery services. The government has shown considerable emphasis on this sector through the implementation of Foreign Trade policies like FTP 2023 and PM Gatishakti like Yojanas.

Weak Economic Environment:- The logistic businesses have faced significant challenges due to a weak macroeconomic environment. However, there is some positive news as indicated by recent commentary from India's chief economic advisor. It suggests that there has been a noticeable improvement in the domestic economic environment, and industries are displaying promising growth momentum.

Industry Analysis: Analyzing the Road Ahead

Road transport accounts for 60% of India's logistics landscape, with the road express delivery sector growing at a rate(nearly 15.8%) surpassing the country's GDP. TCI Express, a key player in road transport, is poised to capture a significant market share of this largely unorganised industry(90% Local player). Currently, 86% of their revenue is derived from road express services.

The growth of road express logistics can be attributed to the substantial shift of logistic transportation from rail mode to roadways. You can read more about the industry in here.

Company Analysis:-

Let’s understand the Company and Business in a questionnaire format.

What is TCI Express’s Core business and Revenue Mix?

The company's primary focus lies in providing express delivery services, with road express accounting for approximately 86% of its revenue. TCI Express has built a strong customer base consisting of Small and Medium Enterprises (SMEs) and corporate clients, contributing to around 50-55% of its revenue. Attached below are a few charts illustrating these points.

The ongoing development of infrastructure is creating opportunities for profitable expansion in its major surface express business.

What’s Unique about the company?

Asset Light Model:- This is the most unique aspect of the company, as it generates a significant amount of revenue by utilizing a minimal level of physical assets. For example, they prefer to rent trucks instead of owning them.

This "Asset Light model" strategy has helped the company achieve a higher operating profit margin, even in the current unfavourable economic situation. The company procures or hires assets based on demand and supply requirements. This is also a crucial factor that contributed to the company's achievement of an 85% capacity utilization rate in the previous fiscal year (FY22) by utilizing outsourced vehicles.

How are they managing to achieve profit growth while others are struggling?

Typically, there are two ways to attain profit:

  1. Increase sales.
  2. Reduce costs.

During an economic downturn, generating revenue at the same pace becomes challenging, making it difficult to rely solely on increasing sales. Therefore, cost reduction becomes a more viable approach. The company has implemented automation at its Gurgaon sorting center, where items are arranged before dispatching them to customers. This automation has significantly increased the speed of operations while simultaneously reducing labor costs. Additionally, the asset-light model adopted by the company allows them to maintain lower fixed costs. The remarkable cost efficiency achieved by the company is truly commendable.

What's new with the company? Is the company undertaking any capital expenditures (Capex)?

This is a critical question because, for a company to experience growth, it must expand its operations. Companies that fail to undertake any expansion are likely to witness minimal growth. However, TCI Express is rapidly growing by significantly expanding its distribution network, nearly doubling its branch offices over the past five years to 950.

The company has allocated 500 crores for the next five years (FY23-FY28) to establish new sorting centers and invest in automation, aiming to enhance operational efficiency. They have already invested 125 crores in capital expenditure this year.

In the previous fiscal year (FY22), TCI Express ventured into new segments such as Rail Express (which showed better growth compared to the other two new segments), C2C business, and Pharma cold chain (ensuring the transportation of pharmaceutical products within prescribed temperature environments). These new ventures have already begun contributing approximately 18% to the company's revenue, and this segment has the potential to be a game-changer, improving the company's profit margins.

Promoters stake?

The promoter's stake in the company has witnessed a notable increase of 3%, rising from 66.66% to 69.66% since last December. This development is highly positive as it indicates the promoters' confidence in the company's future prospects.

Furthermore, the company recently conducted a buyback of 75 crores at a price of 2050/- per share. This strategic move aimed to enhance various financial ratios such as EPS (Earnings Per Share) and ROE (Return on Equity) by reducing the number of outstanding shares through absorption.

They have increased their number of customers by 137% in last five years from 1.6Lakh to 2.2Lakh.

Analysing Financials

Revenue and Profit Growth






Net sales






Operating Profit






Net Profit






The company's revenue and profit have consistently exhibited positive growth, except during the Covid period. Despite the impact of a weak macroeconomic environment on the sector, the company has demonstrated positive growth in both revenue and net profit. Over the past five years, the operating profit growth and net profit growth have maintained an impressive CAGR of 16.5% and 19% respectively. This performance is notably commendable when compared to its peer companies.

Improved Margins-Strong Operational Efficiency

This is the most attractive aspect of the company: achieving operational cost efficiency through automation and other effective measures.

The operating profit margin (the profit remaining after deducting operational expenses from sales) and net profit margins have significantly increased over the last three years.

Other Financials:-

The company achieved its highest-ever cash flow from operations of 147Cr, which was accomplished through cost reduction.






Net cash flow from operating activities






Furthermore, the company is debt-free, which is highly encouraging for investors. Additionally, the company boasts an impressive ROE (Return on Equity) of 24.60%, which is one of the highest among its peers. This indicates that the company is generating profits based on the equity invested. The company's ROCE (Return on Capital Employed) of 32.7% also stands as one of the highest in the industry.


There are not many risks to the business, except for a few such as the continuation of weak macros, competitiveness in surface express, and potential business degrowth among its SME clients, which constitute its biggest source of revenue.

Technical Tadka

After conducting a thorough analysis of the company's fundamentals, it is evident that TCI Express is fundamentally robust. Now let’s talk about what technical says.

Presented here is a weekly chart of TCI Express, illustrating the stock's position above the 200 Exponential Moving Average. This indicates a sustained bullish trend from a long-term perspective. Additionally, the stock has consistently found support around the 1400 zone on multiple occasions. Furthermore, there is an ongoing attempt by the stock to break out of the upper incline line of a triangle pattern.


We are not a SEBI registered Investment Advisor. This is not a recommendation but only a case of sample analysis that might help you to do fundamental research on various companies.


Based on the aforementioned research, our conclusion is that the company exhibits a strong fundamental foundation and is currently trading at a significant discount of approximately 35%. Considering its historical P/E ratios, growth projections, and profitability indicators such as ROE, ROCE, and EPS, the current P/E ratio of 45 appears to be fair as compared to its peers. With high tapping potential TCI Express has a lot of unorganised markets to cover. The stock's valuation appears to be undervalued, suggesting a strong potential for upward movement. And based on our Technical(Bullish) and Fundamental analysis(bullish):-

View:- Long Term

Current Market price(CMP):- 1680

Target:- 2260 and above

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