Sharekhan Bets On Midcap Logistics Stock, Buy For 20% Gains, Jumps Over 340% In 3 Yrs

Sharekhan has come up with a Buy recommendation on Transport Corporation of India Ltd. (TCI) with a target price of Rs. 860 apiece. According to the given target price assigned by the brokerage, if you buy the stock at the current market price, it can fetch gains of 20%.

TCI is a logistics sector company engaged in the Business of Freight Transport, Supply Chain Solutions and Transport through Seaways. It is a midcap company with a market capitalisation of Rs. 5,598.53 crore.

Valuation - Retain Buy with a revised PT of Rs. 860

According to Sharekhan, TCI is expected to drive overall revenue growth with strong growth envisaged in SCM business, healthy growth run-rate in the freight business, while Seaways remains flat on lower volumes. The addition of one more ship in Seaways is keenly awaited, which would provide a fillip to its growth outlook. TCI's multi-modal capabilities and exposure to almost all major end user industries are expected to drive growth.

The brokerage said, "We expect consolidated revenues/ operating profit/net profit CAGR of 13%/14%/13%, respectively, over FY2023-FY2025E. The stock is currently trading at a P/E of 14x on FY2025E earnings which is at a high discount to its peers. We expect TCI to be on a long-term growth trajectory, driven by positive sectoral fundamentals and its inherent strengths and capabilities."

It added, "We retain our Buy rating on the stock with a revised SOTP-based price target (PT) of Rs. 860 as we factor in higher valuation of its Transystem JV changing valuation methodology to P/E based from P/B earlier."

Stock's Last Traded Share Pirce & Returns Over The Past 5 Years

The last traded share price of TCI on NSE is Rs. 721.80 apiece, up 0.13% from its previous close of Rs. 720.85 apiece. The stock performed well over the past 5 years.

It jumped 2.07% in the past 1 week, 7.83% in 1 month and 18.05% in 3 months, respectively. It has fallen 0.74% in the past 1 year. It gave a multibagger return of 342.14% in the past 3 years, while in the past 5 years, it gave 150.45% positive return.

The stock recorded its 52 week high on October 20, 22022 at Rs. 844.95 apiece and 52 week low on 23 December 2022 at Rs. 555.25 apiece, respectively.

Disclaimer - The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.