TCI Express: Confident of achieving margin guidance; automation will be game changer for the company – Times Now

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Mumbai: Logistics companies have gained significantly in the past few weeks with TCI Express gaining 75% and Gati gaining nearly 60% since early May. ET NOW caught up with the management of TCI Express to understand the outlook for the industry and the company.

In an exclusive interview with ET NOW, Chander Agarwal, MD, TCI Express said, Demand is about 85% of March levels, and if there is the third wave we could see demand at about 95% levels. Expect SME volumes to sustain going and SME will be a substantial part of revenues throughout the year. He said, Logistics industry is the backbone of the economy, FY22 GDP growth expectation is about 8-9% then we should be able to grow 16-18%.

Agarwal believes they should be able to achieve margin guidance. Management had guided that the FY22 margin would improve ~100bps, and it is targeting a 20% EBITDA margin by FY23. 2021 will see major automation in technology upgrade and will spend about Rs 50 cr. The company has capex plan of Rs 500cr - of this 50% will be on technology and automation advancement and this will be a game changer for the Company.

Agarwal said, we are the only debt-free logistics company and Return on capital employed can be maintained. The company has a robust capex plan but this will be funded by internal accruals. Volume growth, better capacity utilisation will aid margins going ahead, automation will improve capacity utilisation and will improve efficiencies.

Speaking about the industry, Agarwal said that there are three challenges that the industry faces. High Fuel prices is an industry concern, India has one of the highest fuel prices in the world, labour needs to be modernised otherwise automation will take over. Infrastructure has improved, but need to see how it can be outside cities to avoid congestion.

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TCI Express: Confident of achieving margin guidance; automation will be game changer for the company - Times Now