TCI Express Limited (TCIEXP) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to TCI Express Q1 FY '27 Earnings Conference Call hosted by PhillipCapital India Limited. Before we begin, a brief disclaimer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance, and it may involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Harsh Shah from PhillipCapital India Private Limited. Thank you, and over to you, sir.

Thank you, Pallavi. Good day, and a very warm welcome to everyone. Thank you for being on the call of TCI Express Limited. We are happy to have the management with us here for a Q&A session with the investment community. The management is represented by Mr. Chander Agarwal, Managing Director; Mr. Mukti Lal, Executive Director and CFO; and Mr. Pabitra Panda, Chief Business Officer. Before we start with the Q&A session, we'll have opening comments from the management. I will now hand over the call to Mr. Chander Agarwal for the opening comments. Over to you, sir.

Thank you. Good evening, everyone, and welcome to the Q1 financial year '27 Earnings Conference Call of TCI Express Limited. I would like to thank all of you for joining us today. I hope you and your families are doing well. Our earnings presentation for the quarter has already been shared on the company's website and with the stock exchanges. And I trust you've had the opportunity to review it. I will start with an overview of our business performance and key strategic initiatives for the quarter. Following this, our Executive Director and CFO, Mr. Mukti, will take you through the financials in detail. The first quarter financial year '27 marked a positive start to the financial year with the company delivering strong broad-based growth across every operating segment. Total income was INR 315 crores, up 9% year-on-year, powered by customer additions, expansion of our operating network and sharp execution across the business. Demand continued to be healthy across manufacturing, especially in pharmaceuticals, engineering, electric vehicles and SME-led shipments. And the accelerating shift towards outsourced logistics players played directly -- added directly to our strengths. The industry as a whole saw elevated operating costs and competitive pricing in certain segments, but our discipline and our focus on service quality and investment in technology kept us firmly ahead of the curve. Surface Express remained the largest contributor of our business growing at a healthy 9% year-on-year strong volumes from existing customers, new accounts and robust industrial growth. We expanded our branch network and opened new facilities at strategic locations, cementing our positions across key commercial corridors. The momentum wasn't limited to the Surface Express. Domestic Air Express grew at an outstanding 29% year-on-year, driven by enterprise account growth, more direct airport deliveries and a dedicated key account management team we built to raise the bar on customer service backed by automation across flight management, pricing and invoicing. International Express grew a strong 27% on new customers, win backs and expanded global carrier partnerships. Rail Express added operational branches, showing pickup density and transit connectivity across major commercial corridors. The start of the quarter was our e-commerce business -- the start of the quarter was our e-commerce Express business, which surged 63% year-on-year to become our fastest-growing service vertical by a wide margin, driven by rising volumes from e-commerce platforms and direct-to-consumer brands, along with our continued investment in fulfillment and last-mile delivery. C2C Express also stepped up impressively, adding new clients, wider regional branch coverage and a larger dedicated vehicle fleet. Across these business verticals, we continue to invest in technology integration, sharpen operational visibility and deepen customer engagement to deliver faster, more efficient and reliable logistics solutions for our customers. Meanwhile, we remain completely debt-free, a position that gives us real strategic flexibility with continued discipline on cost and operational efficiency. This quarter, we also continued to strengthen our multimodal logistics capabilities through technology-led initiatives. We have launched an upgraded Android and iOS mobile app along with the enhanced customer portal, giving customers greater convenience, enhanced shipment visibility and a better experience end-to-end. Beyond business performance, we continued our commitment towards community development through the TCI Express Foundation. During the quarter, our artificial limbs center supported 217 beneficiaries with artificial limbs and other mobility devices. Our Archery Academy in Jharkhand also continued to nurture young sporting talent by providing structured coaching and regular training to at least 50 young athletes, reflecting our continued commitment towards inclusive and sustainable social development. Looking ahead, we are excited to keep investing in multimodal logistics capabilities, technology-led operations and customer engagement across every vertical. With a strong balance sheet and expanding network and with the real momentum with us, TCI Express is exceptionally well positioned to capitalize on the opportunities ahead and deliver lasting value for all our stakeholders. With that, I will hand over the -- hand over to Mr. Mukti to take you through our financials. Thank you.

Thank you, sir, and good evening, everyone. Following on from our Managing Director, was a strong quarter. It was a strong quarter for TCI Express financially, and I will now take you through the number in more details. So during the quarter, income from operations came in at INR 312 crores, up almost 9% from INR 287 crores a year ago. Total income was INR 315 crores, around 9% year-on-year. EBITDA grew 11% to INR 37 crores from last year, with margin expanding to 11.7% from 11.5% of last year. Profit after tax rose to 6% to INR 22.4 crores compared to INR 21 crores in Q1 of last year with a margin of 7.1%. Overall, it was a solid quarter operationally with costs well managed across the businesses. And Surface Express had another excellent quarter as our largest contributor to revenue, driven by customer additions, network expansion and deeper engagement across key industrial sectors. We grew our branch footprint and built our service capabilities in important markets making us more accessible to customer and driving steady healthy growth in coming quarters. Our multimodal service portfolio had a strong quarter as well, as mentioned by Mr. Chander. Domestic Air Express recorded strong growth driven by customer additions, expanded airline partnerships and technology-led efficiency gains. Industrial Air Express depend ties with global carriers and expanded export consolidation. Rail Express expanded its network across key commercial corridors, while C2C Express grew its footprint through customer acquisition, branch expansion and a larger dedicated fleet. Across the board, we are investing in network reach, digital tools and operational excellence to keep this momentum going. Our balance sheet is in great shape with net cash of around INR 180 crores as on June 30, 2026. I would also like to highlight that our working capital moved in the right direction this quarter. Receivables to around 58 days, payable improved to like 32 days. And networking cycle that therefore, it is 26, 27 days, a strong time of better cash conversion in the company. Apart from that, we put around INR 19 crores to work this quarter in branch expansion, network infrastructure and technology initiatives. These investments are in line with our long-term plan to build a foundation for the growth ahead. Looking forward, we are confident in our path running an efficient business while investing in the technology and network capabilities that will sincerely drive longer sustainable growth. With this, I conclude my remarks. We are happy to take your answer. Thank you very much.

[Operator Instructions] The first question is from the line of Chirag from Keynote Capitals.

If you could provide me the volume numbers for this particular quarter?

Yes. So Mr. Chirag, volume number for this quarter is 250,000 metric ton in Q1. It is a growth of around -- volume-wise, this is a growth of around 7.5% in tonnage number.

Just for the sake of understanding on an overall basis, where I'm able to see players in the industry are taking almost 3 percentage to 6 percentage price hikes, our price hikes looks slightly lower than that. So any particular reason behind it because I believe in this industry, realization price hikes takes place across the board.

Yes, yes. So this is true, and we have also taken that price hike from the customer. But as you are aware, like this fuel has hi in mid-May, though it was like supposed to be increased because the war has started in end of Feb and then it was held up by the government due to ongoing elections and ultimately increase in mid-May. So we are also almost passing on to 90% customer this fuel. But ultimate, this price hike has came into an overall June month. So in this quarter, only June month is having positive impact. And this will be showing in the second quarter onwards in a very well manner.

You're talking about the fuel price hike, right? And I'm asking about apart from fuel natural realization hike that we take about 2%, which has been the industry now, but it was expected that we are expected to take almost mid-single-digit kind of a price hike this year.

Yes, yes. So I just missed that. So we held the price hikes due to -- because we know about that government will be certainly increased the prices fuel after like elections. That's why we held up and see -- so that's why we had taken the good price hike in June month in combined with obviously like annual price hikes also and diesel hike also. So both put together. So both put together is a handsome price hike we have taken. And it would -- it is fair to assume that it would be mid-single digit?

Sorry? Will it be fair to assume that it would be in mid-single digits the price hike.

Yes.

Sir, my second question is what would be the mix of SME and B2B?

So, this time, again, in this quarter, SMEs has really bounced back. Earlier in last whole FY '26, our mix was 48-50 to 48 SME and 52 B2B, means big customers. And now in this quarter, start with a very good note as a 50-50, which we desire for that actually. So that ratio is also like, yes, come back to 50-50.

And can you just highlight what would be our mix from e-commerce in terms of revenue.

So e-commerce, that was very low amount. It's not like more than 2%. So this is now we're refocusing, as we mentioned in the 2, 3 last calls because now it's like a stabilized process. It's like a standardized kind of pricing is there. It is profitable now. So we're also refocusing that and getting good market from a small customer, not the big one. So this will be, again, I think is like a high-growth segment for this whole year for us. We're making various efforts in this one in e-com segment. So it's around 2%, 2.5% of overall revenue part yes.

The assignment is not wrong. Generally, e-com business is a lower EBITDA margin business compared to what we used to earlier have, about 15-16% kind of levels that we used to have. So at earliest time that we didn't get into the e-com business because of the competition and the kind of margin it used to give. So the strategic shift that you are taking will it be fair to assume that there have been significant volume developments that are taking place due to which you are exploring this as a segment?

So we are taking overall because there is various advantage of that. One is D2C segment is also growing very well. And this is a profitable one in the EBITDA range, if you talk about so it is in the range of 16% to 18%, and that's why we continue with that. Second also, like delivery to these -- this platform is increasing day by day, means more merchants are sending to goods to them. So if we have a relationship with these all platform, then we have the advantage to the green channel and fast deliveries and also ultimately, this is also support to our surface business also, which we like found once we were like in touch with these all kind of e-com players. So direct business we are gaining. That is also in our strategy where we have to gain the businesses from the small and small B2C players, then D2C market is also there. And then e-com-related B2B market is also big, as you are aware about that. So we're targeting that market as well. So it is an overall strategy. We're creating a team on regional level also. We're expanding team. We opened up the branches to gain the more like regional kind of delivery because as you know, like these are -- e-com deliveries are basically on a city level. So we are expanding that footprint also hiring bikers and all. So this way, it is overall strategy is taking in a very big way.

[Operator Instructions] The next question is from the line of Koundinya from Jefferies.

Sir, just can you help us understand what are parts of e-commerce that you are present and what are the -- what are the services that you're offering in? Because it appears it's primarily focused on first mile or last mile, but I also understand that you have strength on the mid-mile. So just trying to understand this business a bit better, please.

Yes. So it is very much visible. We're targeting obviously last mile, first mile deliveries also with that small customer like one customer is delivering 5,000 dockets in a month regional level supposing from Mumbai to all Maharashtra. So we're doing that. And again, targeting below 5 kg kind of packet has to be delivered through the bike. Second, D2C, obviously, again, every company, beauty companies or other like pharmaceutical companies sending directly to last mile customers. And third thing, we're also focusing to like fulfill these all like dark store, companies also sending or merchants sending the goods to them. So these kind of put together, we overall making effort. We also registered ourselves on a unicommerce platform where thousands of merchants are there and we're approaching them. So that's why we're taking overall steps to how we can increase our footprint in this e-com business overall e-com business.

Sir, just trying to understand, you did speak about 16%, 18% EBITDA margin. But from our understanding, last mile is, I mean, very taxing and it's not so profitable. Just please help us understand -- I mean is it -- how is it to make money here?

Yes. So again, we are not going into much competitive market where there are less profits. We are going on the small customers, which is allow us to be getting the margin. So this is a very clear strategy actually from day one. And again, this is not like we are not doing crores of business in that. It is a very small business. And we will be thoughtfully with the margin, we will be only going with that. This is very clear.