Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Transport Corp of India Ltd (BOM:532349, Financial) reported a 12%-13% year-on-year growth in top-line revenue for the quarter.
- The company remains net debt-free, with a successful buyback and a strong cash position of INR280 crores.
- Seaways division performed exceptionally well, with a 22% increase in top-line and a 65% increase in bottom-line.
- The company has integrated advanced technology, including multiple APIs from Ulip, enhancing operational efficiency.
- Joint ventures, including CONCOR and cold chain, have shown strong revenue and profitability growth.
Negative Points
- The freight division is experiencing challenges with a 10% decline in EBITDA due to competitive pressure and limited growth.
- Receivables have increased due to tighter credit conditions and higher interest rates, impacting working capital.
- The automotive sector slowdown and production cuts have negatively affected the freight business.
- Margins in the supply chain business are slightly weaker due to investments in new contracts and warehousing.
- The company faces competitive pressure from regional and unorganized players, affecting pricing and margins.
Q & A Highlights
Q: Receivables have increased significantly in H1 compared to last year. What caused this, and do you expect it to ease in H2?
A: The increase in receivables is in line with revenue growth. However, tighter credit conditions and higher interest rates have led some large customers to delay payments. We expect these issues to resolve in the next half year. - Ashish Tiwari, Group CFO
Q: The Seaways business has shown significant margin improvement. What is driving this, and what are your expectations for the rest of the year?
A: The margin increase is partly due to geopolitical factors causing capacity constraints. While international freight rates have eased, we expect to maintain current margins, though predicting future trends is challenging. - Vineet Agarwal, Managing Director
Q: Freight division margins have declined, and the mix of FTL and LTL remains unchanged. What are your plans for this segment?
A: The freight division faces competitive pressure and cost inflation. We are focusing on stabilizing margins through branch network expansion and technology enhancements. We expect improvements in the next 2-3 quarters. - Vineet Agarwal, Managing Director
Q: What is your strategy for the quick commerce business, and how do you plan to grow it?
A: Quick commerce is a learning opportunity for us, providing consumer insights. We focus on fulfillment rather than last-mile delivery, and we aim to grow without sacrificing margins. - Vineet Agarwal, Managing Director
Q: How do you see the freight division evolving, given the current challenges and future growth prospects?
A: We expect the freight business to recover, focusing more on LTL, which offers higher margins. The business remains profitable with a decent ROCE, and we are developing customized solutions to drive growth. - Vineet Agarwal, Managing Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
