Transport Corporation of India Limited (TCI) Q3 FY26 Earnings Call Summary

Summary

Transport Corporation of India Limited – Q3 FY 2026 Earnings Call Summary Thursday, February 05, 2026

Event Participants

Executives 2 Ashish Tiwari (Group CFO), Vineet Agarwal (Managing Director)

Analysts 5 Deepak (Unify Capital), Dhruvin (Organization Not Specified), Krupa Shankar (Avendus Spark), Sunil Kothari (Unique PMS), Vikram (PhillipCapital)

Financials & KPIs

Geographic & Segment Commentary

• Freight Division: Performance remained challenged due to a weak MSME sector and intense competition from regional and express players. Management expects another 1-2 quarters of pressure before a cyclical recovery begins, supported by internal management changes and network expansion.
• Supply Chain Solutions: High growth momentum continues (15% top-line) with a solid pipeline in FMCG, Quick Commerce, and Automotive. Margins are currently flat due to “bench strength” investments and gestation periods for new large-scale contracts.
• TCI Seaways: Exceptional performance with margins in the 40-45% range due to soft bunker prices and all ships being operational after dry docking. Management anticipates some normalization in FY27 as new capacity brings higher depreciation and fuel costs rise.
• Joint Ventures (TCI-CONCOR, Cold Chain, Transystem): JVs remain a critical growth engine with TCI-CONCOR growing at 20%+ and Transystem at 12%. Transystem is specifically benefiting from Toyota-Maruti cross-badging and upcoming capacity expansions in Western India.

Company-Specific & Strategic Commentary

• Multimodal Shift: TCI is aggressively moving customers from road to rail/sea, handling 121,000 containers in 9M. This shift resulted in saving 140,000 tons of carbon emissions.
• Capacity Expansion: The company is adding two specialized double-deck rakes by late 2026 to provide strategic capacity for automotive clients when Indian Railways availability is low.
• Diversification Strategy: Management highlighted that the multi-divisional structure acts as a hedge; currently, Seaways and JVs are compensating for cyclical weakness in the Freight segment.
• Bespoke Solutions: Moving beyond standardized logistics to “bespoke yet scalable” services to capture higher market share in high-growth sectors like Quick Commerce.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Seaways Margin Sustainability

• Question: Will the current high margins in Seaways continue, or is a steep decline expected? (Krupa Shankar)
• Answer: No steep decline is expected, but margins will normalize to the 30-40% range in FY27. This is due to higher depreciation from two new ships and anticipated increases in fuel costs (Vineet Agarwal).

Freight Division Recovery

• Question: What gives confidence that the Freight division will revive after two quarters? (Deepak)
• Answer: We are seeing a 3-year cycle bottoming out. Confidence stems from internal management changes, network expansion, and a “trickle-down” effect from recent GST changes benefiting MSMEs (Vineet Agarwal).

Strategic Value of Owned Rakes

• Question: When will the two new rakes contribute, and what is their monetary impact? (Krupa Shankar)
• Answer: Expected by end of calendar year 2026. Impact is more strategic than monetary; they allow us to offer double-deck capacity and guaranteed service when Indian Railways wagons are unavailable (Vineet Agarwal).

Supply Chain Investments

• Question: Why are supply chain margins flat despite 15% revenue growth? (Deepak)
• Answer: We are investing in “bench strength” (people and systems) and warehouse capacity ahead of the curve. As these new contracts reach full utilization in Q4 and beyond, margins should return to the 9.5-10.5% range (Vineet Agarwal).

Key Takeaway

TCI reported a stable Q3 FY2026, characterized by 9% consolidated revenue growth and 12% PAT growth for the nine-month period. The performance was anchored by an exceptional Seaways segment, which maintained 40-45% margins due to lower fuel costs, and a resilient Supply Chain division growing at 15% YoY. While the Freight division remains in a cyclical downturn due to MSME weakness and FTL pricing pressure, management expects a recovery within two quarters. Strategic focus remains on multimodal expansion, evidenced by the 9M handling of 2,133 rakes and a significant ₹450-500 crore CAPEX plan for FY27, which includes the delivery of two new ships. TCI maintains its FY26 guidance of 10-12% top-line and 15% bottom-line growth, relying on its diversified business model to navigate segment-specific headwinds. The company remains well-positioned to benefit from government infrastructure tailwinds and the increasing adoption of coastal shipping.