Summary
TCI Express Limited - Q3 FY 2026 Earnings Call Summary Tuesday, February 03, 2026 4:00 PM IST
Event Participants
Executives 3 Chander Agarwal (MD), Mukti Lal (ED & CFO), Pabitra Panda (CBO)
Analysts 6 Anurag Katta (Equirus Securities), Ashwin Reddy (Samatva Investments), Chandramouli Jagannathan (Individual Investor), Dhruvin Kadakia (SKP Securities), Kanish Jain (Bastion Research), Koundinya Nimmagadda (Jefferies)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹314 crores | +6% YoY; Driven by festive demand and traction in new business verticals. |
| EBITDA | ₹37 crores | +12.1% YoY; Margin stood at 11.6% vs 11.1% in Q3 FY25. |
| Profit After Tax (PAT) | ₹23 crores | 7.2% PAT margin; Stable performance despite variable demand. |
| Surface Express Volume | 2,55,000 MT | Supporting core revenue; 9M FY26 total stands at 7,37,000 MT. |
| Net Cash Position | ₹146 crores | Debt-free balance sheet with healthy liquidity. |
| Receivables / Payables | 60 / 39 days | Net working capital cycle of 21 days; slight increase due to festive timing. |
| ROCE (9M FY26) | 19.6% | Reflects capital efficiency despite ongoing infrastructure investments. |
| Interim Dividend | ₹7 per share | 350% payout on face value announced for shareholders. |
Geographic & Segment Commentary
- Surface Express: Remained the largest contributor (approx. 81% of revenue); saw a resumption in growth driven by automotive, defense, solar, and EV sectors. The company is transitioning from smaller to larger truck capacities (e.g., 16-tonne to 25-tonne) to scale with demand.
- Rail & Air Express: Rail grew 24% YoY aided by pharma volumes; domestic Air grew 14% and International Air grew 28% due to trade-in activity and cargo consolidation. Management is creating independent infrastructure for these segments to ensure service quality.
- C2C & E-commerce: C2C segment scaled 32% YoY through wider manpower coverage; E-commerce volumes remain stable at 2.5% of revenue as the company focuses on smaller, profitable B2C/D2C players rather than low-margin giants.
Company-Specific & Strategic Commentary
- Network Expansion & Manpower: Added 5 new branches in Q3 and over 300 employees in 9M FY26 to align with network growth; plans to increase total new hires to 500 by March end.
- Yield Improvement: Implementing contract renewals with revised pricing earlier than usual; targeting a 100 bps yield improvement this year and 200 bps in FY27.
- Quality Certifications: Achieved ISO 9001, 14001, and 45001 certifications; recognized as a “Great Place to Work” for the sixth consecutive year.
- Capex Revision: Projected 5-year Capex (ending FY27) revised down to ₹400 crores from ₹500 crores, with approximately ₹150 crores remaining to be spent over the next 1.5 years.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 17-18% for FY27 | Based on 15% volume growth plus 2% price realization improvement. |
| EBITDA Margin | 15%+ by FY28/29 | Gradual recovery from building capabilities; targeting 13%+ in FY27. |
| Volume Growth | Double-digit for Q4 FY26 | Management sees positive momentum in Jan-Feb following festive dips. |
| Capacity Utilization | 85-86% | Target range to maintain service levels without compromising speed or safety. |
Risks & Constraints
| Risk | Context |
|---|---|
| Labor Cost Pressure | Implementing new labor codes resulted in a ₹60 lakh one-time impact on employee costs this quarter; ongoing cost increases expected due to social security regulations. |
| SME Volatility | While currently contributing 49% of revenue, SMEs face macro headwinds; however, management notes high stickiness due to express service guarantees. |
| Utilization vs Service | Exceeding 86% utilization risks service quality degradation, necessitating a dynamic shift to larger truck capacities which could momentarily impact margins. |
Q&A Highlights
Growth & Yield Strategy
- Question: What gives confidence for early price hikes? (Koundinya Nimmagadda)
- Answer: Increased toll and labor costs are industry-wide; customers are willing to accept hikes for service reliability. Removal of certain tariff penalties also improves the environment (Mukti Lal).
SME Segment Stability
- Question: Are SME clients shifting to cheaper 3PL models? (Kanish Jain)
- Answer: No, SMEs require the “on-time, damage-free” guarantee of Express. Government support for SME clusters further stabilizes this base (Mukti Lal).
Capital Allocation
- Question: Any plans for a buyback given current valuations? (Chandramouli Jagannathan)
- Answer: Tax changes in the recent budget make buybacks more attractive; while no current proposal exists, management will discuss it internally (Mukti Lal).
Margin Recovery
- Question: When will EBITDA return to the 16% peak? (Chandramouli Jagannathan)
- Answer: Currently in a capability-building phase for Rail/Air. As these reach scale and utilization, margins will expand 100 bps annually to reach 15%+ by FY28/29 (Mukti Lal).
Key Takeaway
TCI Express delivered a stable Q3 FY26 with 6% revenue growth and an improved EBITDA margin of 11.6%. The company successfully pivoted from a period of subdued surface growth by capturing high-double-digit increases in Rail (24%) and International Air (28%). Strategically, the firm is doubling down on SME and emerging sectors like EV and Solar, while aggressively expanding its sales force by 300-500 people to support multimodal growth. Management revised its 5-year Capex downward to ₹400 crores, prioritizing prudent capital allocation over aggressive expansion. While labor cost pressures and SME macro-headwinds remain watch points, the company guides for a robust FY27 with 15% volume growth and gradual margin expansion toward the 15% threshold. TCI Express remains well-positioned to leverage its asset-light model and debt-free balance sheet as industrial demand stabilizes.
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