Motilal Oswal turns bullish on Transport Corp stock, sees 26% upside

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Financial services firm Motilal Oswal Financial Services maintained focus on Transport Corporation of India shares after setting a target price of Rs 810, which is 26 per cent higher than the market price of Rs 643. The new target is 52- lower at 5.59 per cent. The week’s high level of Rs 858 was touched on Jan 17, 2022. The brokerage firm cited strong automotive demand, coastal shipping demand and traction in multimodal logistics as the reason behind the strong expectations.

Shares of the logistics and supply chain management company closed at Rs 642.70, down 0.75% on BSE today. The stock declined after two sessions of gains. The stock of Transport Corp opened at Rs 664, up 3.31%, which is a one-day high on BSE. Logistics stock is trading below the 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

Transport Corp stock has fallen 9.5% in one year and is down 14.62% since the beginning of the year. The stock has declined by 17.66% in one month.

A total of 5,311 shares changed hands valuing Rs 33.97 crore on the BSE. The market cap of the firm stood at Rs 4,944. 71 crores

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Motilal Oswal said, “We maintain our positive stance on Transport Corporation as it is expected to benefit from: a) Strong automotive demand coupled with new customers, driving 3PL growth, b) Sustained on-demand coastal shipping Emphasis on, c) traction in multimodal logistics and, d) increasing contribution of LTL in the freight segment, which will be margin-accelerative.

The financial services firm expects 18%/13%/13% growth in revenue/EBITDA/PAT over FY22-24, accounting for the increasing share of less than truckload (LTL) services in total freight revenue. Continued confidence for new customer 3PL, and coastal shipping.

The logistics firm reported a 4.14% decline in its consolidated net profit at Rs 73 crore for the quarter ended September, as against Rs 76.16 crore in the same quarter a year ago. However, total income grew by 13.45% to Rs 939.46 crore in the second quarter as against Rs 826.06 crore in the September quarter of the previous fiscal.

Transport Corporation of India Limited is an integrated multimodal logistics and supply chain solutions provider. The company also provides multimodal transportation solutions. The company operates through four segments: Freight Division, Supply Chain Solutions Division, Sewage Division and Energy Division. The company operates through three business divisions: TCI Freight, TCI Supply Chain Solutions and TCI Sewage.

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