Transport Corporation Result; Target 10-12% Revenue Growth In FY27 As Well | CNBC TV18

Ajouté : 2026-05-27

[00:00:06]Welcome back to Halftime Report on CNBC TV18. Nifty still holding to own to 23,900 levels, but let's put the spotlight on the first management for today. We have Transport Corporation who reported their numbers. A decent set of numbers that came in Q4 FY26. When you look at it for all the quarter, they managed to see a 12.3% growth. Business has seen a bit of a pickup coming in in Q4. Although FY26, they'd given a guidance of 10 to 12% for revenue growth. Slight miss there, right? FY26 numbers have come in at 9.5% in terms of revenue growth. Uh C-way margins, that has done well for the company. But to talk to us about the outlook of the company going forward, let's bring on board Vineet Agarwal, Managing Director at Transport Corporation of India to discuss that. Uh Vineet, good afternoon. Thank you so much for joining us on the show. I want to start by talking about that FY26 guidance. You spoke about a 10 to 12% range where you would come in. Just a slight miss there, but I want to know for FY20 27, given what we are seeing in terms of the current geopolitical tensions, the current scenario, what is the FY26 outlook that you have?

[00:01:09]So FY27, uh you're right, and it's a pleasure to be there.

[00:01:13]Uh we are with you guys. Um see, uh we the the unexpected part was the Gulf War. So, that happened, I think, on February 28th. So, March is typically the best month for us in the year. And uh there, the amount the the business that could have happened that month did not happen. So, we missed it by a bit.

[00:01:35]Um and uh we were quite confident to get there.

[00:01:38]Uh notwithstanding, I think the divisions have all done relatively well, and we started to see some pickup there.

[00:01:45]Uh all our businesses performed very well.

[00:01:48]Now, on the margin side also, we saw good uh growth, and uh the guidance for that was about also about 10 12%, and we happened to achieve that.

[00:01:57]Now, going forward for the FY27, um the most obvious thing is, you know, there is a going to be an inflationary impact because of fuel pricing increases and just general cost increases across the system. So, which essentially means that would add to some revenue increase.

[00:02:12]We would have some volume increase, but we're also anticipating some demand uh pullback towards the end of the year, or rather the second half of the year. So, which would mean that uh that net net looking at about again the same 10 to 12% kind of top line increase. Okay, 10 to 12% our top line increase. Uh Vineet, as you said, there are a lot of things happening, right? Uh uh so, while 10 to 12% is what would happen on the revenues, what's happening with costs right now? Because uh fuel prices have increased on the commercial side, it is higher. We're seeing retail price hikes as well. Commodity costs in general have increased. Is that impacting uh some sort of demand? Is that impacting some sort of some sort of the functioning of the business overall?

[00:02:52]Well, not directly for uh in impact, because, you know, we have uh contracts where we pass on all these cost increases, whether it is fuel price hikes. You know, we on diesel side, we've had a seven seven and a half rupee kind of increase, uh which we have contracts for back-to-back in uh pass on.

[00:03:10]Uh also, in terms of uh you've also seen that manpower costs have gone up in some places where minimum wages some states have increased that. So, that has an impact on our warehousing business, and uh we again pass them on to our customers. So, uh from our side, we are quite protected, but what really happens is that this kind of inflation impact is going to possibly eat up some demand in going forward. Already in the south, we're we're hearing about some slowdown in terms of consumer durable uh consumer durable uh offtake, uh because price hikes have happened on either due to raw material or just general inflation. So, some uh if there's some demand erosion that happens, that can start affecting uh the overall uh economy. But, uh for us, we are relatively well protected with these pass-throughs.

[00:03:56]Okay.

[00:03:58]You know, Vinit, I want to talk about two specific segments as well. One is the freight segment and the CV segment.

[00:04:04]Now, when you look at the freight segment, EBIT margins, they have come off slight bit, right? While in terms of the CV margins, they managed to see an improvement. So, for FY17 or the outlook that you could give for the next couple of quarters, if possible, what is it that you're keeping an eye out on in terms of margins over there? What should we watch out for?

[00:04:23]Well, on the freight side, clearly, there is some competitive pressure and other areas of impact. And as I said, you know, sometimes the pass-through doesn't happen all the time right away. There is sometimes a lag. Notwithstanding, I think freight should go do relatively better this year. The focus towards LTL is increasing and that will continue. On the CV side, the margin we do not expect any margin expansion to happen because we have a fixed capacity there. And our ships are depreciated and you know, although the bunker prices have gone up by 100% we've been able to pass on a lot of that. What's going to happen towards the second half of the year, that is on Q3, end of Q3 and start of Q4 is addition of two new ships that are coming in. We've ordered these ships in China and they should start coming in and hence we would have some increase in revenue, but also some cost will initial cost of start-up etc. will go up.

[00:05:19]So, I think for the full year we would have a possibly a moderated CV margin, but net impact is that it's still going to be positive.

[00:05:28]That means would it be in that CV margin of 28-29% is what your target is? Would it be in that range or still plus 30 somewhere on that?

[00:05:38]I think that 25 to 30% is a reasonable aspect.

[00:05:42]See, also, typically when monsoon starts, some CV business tends to come off because ships don't operate that efficiently.

[00:05:50]But because you operate only on the domestic sector, so so some of that might happen. So moderate between 25 to 30%. Uh Vineet, you're saying that you are able to pass on the hikes that you're seeing to customers.

[00:06:03]It is a pass-through model. Is there any case that you will not be able to do that because demand would get impacted and ultimately it would impact your margins? Is that a risk that your business is factoring in considering there is still a lot of uncertainty and inflation continues to be a worry.

[00:06:17]Uh sometimes the there's a lag with this, you know, you know, the hikes have happened in the middle of the month and we have to pass on this. Usually they we'll pass it on towards the end of the month. So there is some give and take in this. So not something to worry about. The trend that however that is very keenly observing we are observing is that because of these fuel price hikes on the road side, railways becomes an important element of actually switch over. So we have a rail business and we are seeing very good growth there. So a multimodal business and this shift that strategically that we've done in the last decade is really helping us. So across the board if there's some volume that comes off on the road side, we should be able to capture some of that on the on the rail side or even on the sea side.

[00:07:06]Thank that point, Vineet. Thank you so much for joining us today and letting us know the kind of business that you saw in the quarter gone by. Most importantly, what the outlook could be like considering that we are seeing a lot of uncertainty because of West Asia war. That's the word coming in from Transport Corp. The stock absolutely flat with some positive bias. Time for a break now. Dharmesh Shah of ICICI Securities will join in with some trading strategies on the other side.

[00:07:28]Stay tuned.

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