Closing % YTD % 1 YR

SPARK RESEARCH SENSEX 37,734 (8.53) (0.74)

23 September 2020 NIFTY 11,154 (8.34) (1.07)

WHAT’S INSIDE
SECTORAL INDICES
▪ Company Update – TCI Express – BUY (TP of Rs. 905)
Closing % YTD % 1 YR
− Focus on improving density of branch network in key markets to target growth in SME segment
BSE Auto 17,390 (5.9) 1.8
− Semi automation in new sorting centers to reduce turnaround time by 50%
BSE Bank 24,055 (34.4) (26.3)
− MORTH notification permitting increase in height of truck body to provide additional volume per truck without BSE Cap Goods 13,233 (21.9) (26.8)
commensurate increase in costs
BSE Cons Dur 23,016 (8.0) (10.1)

▪ Exchange and Currency Performance BSE FMCG 10,847 (4.9) (3.9)

BSE IT 20,031 29.4 28.6
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NIFTY OUTPERFORMERS
Price % YTD % 1 YR
Dr. Reddy'S Laboratories 5,168 79.8 82.1
Reliance Industries Ltd 2,211 47.4 77.9
Cipla Ltd 778 63.0 68.3
Hcl Technologies Ltd 821 44.5 56.5
Bharti Airtel Ltd 471 3.3 32.1

NIFTY UNDERPERFORMERS
Price % YTD % 1 YR
Indusind Bank Ltd 544 (64.0) (61.7)
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INDIAN LOGISTICS INDUSTRY CMP 1Y Target Rating
Rs. 786 Rs. 905 BUY
TCI Express

TCIEXP has derived significant operating efficiency post GST implementation as EBITDA CAGR from FY17-20 stood at 25% vs. volume/realisation CAGR of
9%/3% respectively. We note that while realisation increased from Rs.11.4/kg in FY17 to Rs. 12.4/kg in FY20, transportation cost remained flat at Rs. 8/kg on COMPANY UPDATE
the back of improving truck fill factor with an asset light model. We expect the top-line and bottom line growth to remain strong at 20% and 40% CAGR from 23 September 2020
FY21 to FY23 respectively on the back of 1) improving density of branch network in key markets so as to target growth in the SME segment, 2) semi
automation in new sorting centers to reduce turnaround time (TAT) by 50%, and 3) the recent Ministry of road and highways (MORTH) notification permitting Industry LOGISTICS
increase in height of containerized truck body by 8-9 inches (potential addition of 2-2.5T in a 14T truck), thereby providing additional volume per truck
without a commensurate increase in costs. We build in a tonnage growth of 17% through FY21-23E on a low base, aided by sustained growth from existing CMP Rs. 786
clientele and incremental tonnage from new branches. The aforesaid efficiencies are expected to result in EBITDA margin expansion of 320 bps (from FY20) to Target Price Rs. 905
~15% by FY22E. Maintain BUY with a TP of Rs. 905 based on 27x FY22E EPS. Expect TCIEXP to continue to maintain strong return ratios of ~27% ROCE in
FY22/FY23 with OCF/EBITDA remaining at 90-95%. Key Stock Data
Branch addition: Expect branch count to increase from 800 in FY20 to 1,000 by FY22, led by management emphasis to reach deeper pockets in Metros and Tier 1 Bloomberg TCIEXP IN
cities (estimated to be ~70% of total tonnage carried). Branch increase is expected to result in 1) addition of new SME customers and 2) improve branch-to-hub
cargo collation efficiency with the help of ERP systems. Branch addition takes place post assessment of volume potential in the location radius, with an extremely Shares o/s 38mn
low-fixed cost base (Rs. 25,000-30,000/month + set-up cost of ~Rs.55,000), thereby ensuring quick breakeven (approx. two months). Furthermore, new branches
Market Cap Rs. 30bn
are set up closer to existing branches only in the event of a branch hitting saturation levels of over 200 customers, thereby limiting cannibalization. The
incremental cargo from SME clientele is crucial for TCIEXP (~50% of revenue) as it results in better pricing power and shorter working capital cycle compared to its 52-wk High-Low Rs. 950-456
corporate clientele. Expect incremental cargo from feeder network to aid line haul efficiency as it would improve the overall load factor (likely to increase 200-
300bps over medium-term from 85% in FY20). Moreover, TCIEXP aims to reduce unit transportation cost by deploying larger vehicles (14T instead of existing 3m ADV Rs. 30mn
9T) as volumes rise on key routes. We build in 270bps reduction in transportation cost through FY20-22E vs. 390bps witnessed from FY18-FY20. Index BSE500
Amendment to Motor Vehicle dimension rules: Based on the notification published on Jul-20, MORTH has increased the permissible height of containerized
truck from 3.8m to 4m (8-9 inches). The move is expected to accommodate additional ~2-2.5T in 14T vehicle and ~1.3-1.5T in 9T vehicle (~15% increase), thereby Dec’19 Mar’20 Jun’20
reducing the per unit transportation cost. However, the benefits would be applicable based on the type of cargo carried (higher voluminous cargo to limit
Promoters 66.9 66.9 66.9
benefits). While 30% of TCIEXPs line haul fleet (2,000 trucks in 9T and 14T) have already been modified according to new norms, expect the remaining 70% to be
modified by FY22. Expect incremental unit cost benefits to be partly shared with vendors, as vendors bear the cost of modification. Institutions 10.5 10.9 11.5
Owned Sorting centers: TCIEXP aims to set up new sorting centers at 8 locations at a cost of Rs. 4bn to meet its long-term growth aspirations (doubling its Public 22.6 22.2 21.6
revenue in next five years). The new sorting centers at Gurgaon (0.2 mn sq.ft) and Pune (0.15mn sq.ft) are expected to be commissioned in 2HFY21. The new Pledge
sorting centers replace existing leased facilities at Rewari and Pune, respectively. Construction of new sorting centers in Indore and Nagpur is likely to commence
towards the start of 2HFY21. Expect partial automation in own sorting centers to reduce cargo TAT at hub by 50% over the medium-term. The new owned sorting
centers at Gurgaon and Pune would reduce lease expenses by Rs. 30mn p.a. We note that the impact of a large capex outlay on returns profile is negligible (RoCE
and OCF/IC to hover around 27% and 25% in FY22E) due to EBITDA margin expansion.
FINANCIAL SUMMARY (STANDALONE) KEY ESTIMATES REVISION (STANDALONE) RESEARCH ANALYSTS
FY21E FY22E
Revenue EBITDA PAT EPS P/E EV/ MUKESH SARAF
Year Old New Change Old New Change
(Rs. mn) (%) (Rs.mn) (Rs.) (x) EBITDA (x) mukesh@sparkcapital.in
Revenue 8,583 9,136 6% 11,265 11,763 4%
FY20 10,320 11.8% 891 23.2 33.9 24.4 EBITDA 1,015 1,091 8% 1,453 1,757 21% +91 44 4344 0041
FY21E 9,136 11.9% 788 20.6 38.3 27.2 Margin(%) 11.8% 11.9% 12 bps 12.9% 14.9% 203 bps KRUPASHANKAR NJ
PAT 740 788 6% 1,048 1,281 22% krupashankar@sparkcapital.in
FY22E 11,763 14.9% 1,281 33.4 23.5 16.9 PAT (%) 8.6% 8.6% 0 bps 9.3% 10.9% 159 bps +91 44 4344 0098
FY23E 13,328 15.9% 1,545 40.3 19.5 13.9 EPS 19.3 20.6 6% 27.4 33.4 22%
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 TCI Express | Company Update

Sector Valuation Summary

Revenue (Rs. bn) EBITDA % PAT (%) EPS (Rs.)

Company
FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E

TCI Express 10.2 10.3 9.1 11.8 11.6% 11.8% 11.9% 14.9% 7.1% 8.6% 8.6% 10.9% 19.0 23.2 20.6 33.4

VRL Logistics 21.1 21.2 16.4 20.8 11.6% 14.1% 8.0% 14.5% 4.4% 4.3% -3.0% 3.9% 10.2 10.0 -5.4 8.9

Blue Dart 31.7 31.8 28.6 35.7 9.0% 14.9% 13.3% 17.5% 2.8% 0.2% -2.9% 4.3% 37.8 2.6 -34.6 64.7

RoE (%) RoCE (%) Price/Earnings

Company
FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E

TCI Express 30.7% 29.5% 21.2% 27.8% 28.2% 28.6% 20.8% 27.4% 41.3x 33.8x 38.2x 23.5x

VRL Logistics 14.8% 14.3% -8.2% 14.0% 12.3% 12.3% -1.7% 10.9% 15.9x 16.2x -30.0x 18.3x

Blue Dart 16.2% 1.1% -18.3% 32.8% 12.2% 7.3% 0.7% 12.2% 70.8x 1044.7x -77.4x 41.4x

EV/EBITDA EV/Sales
CMP Mkt Cap TP
Company Reco
(Rs.) (Rs. Bn) (Rs.)
FY19 FY20 FY21E FY22E FY19 FY20 FY21E FY22E

TCI Express 25.2x 24.4x 27.1x 16.9x 2.9x 2.9x 3.2x 2.5x 786 30.1 905 BUY

VRL Logistics 6.4x 6.4x 13.7x 5.7x 0.7x 0.9x 1.1x 0.8x 162 14.6 170 ADD

Blue Dart 22.7x 16.2x 19.1x 11.1x 2.0x 2.4x 2.5x 1.9x 2,679 63.6 1,800 SELL

Source: Bloomberg, Company, Spark Capital Research

Page 3
TCI Express | Company Update

ASSET LIGHT MODEL ADVANTAGE

▪ Unit cost comparison

▪ Potential benefits going forward

STRENGTHENING NETWORK AND FLEET

▪ Branch network expansion

▪ Owned Sorting Centers
▪ Benefits of Government amendment to fleet height

PEER COMPARISON

▪ Operational metrics
▪ Financial metrics

FINANCIAL ANALYSIS

Page 4
 TCI Express | Company Update

Unit Cost Comparison with VRLL to reflect on TCIEXP’s superior asset light model
Unit Cost (Per Ton) TCI Express VRL Logistics
FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20* Post GST, TCIEXP’s tonnage has grown at 8% CAGR through FY17-
Tonnage (Mn) 0.7 0.8 0.9 0.8 2.7 2.7 2.9 3.1 20 in comparison to VRLL’s 4% CAGR
YoY (%) 10% 14% 14% -2% 0% 1% 5% 6% While TCIEXP’s lead distance has not changed materially over
previous years, realisation has grown on the back of steady price
Realisation (Rs.) 11,407 11,801 11,978 12,285 5,270 5,559 5,861 5,643
hike (diesel fuel surcharge and other pricing mechanisms to pass
YoY (%) 3% 3% 1% 3% 5% 5% 5% -4% through cost)
Expenditure (Rs.)
Transportation expenses 8,607 8,691 8,625 8,538 2,944 2,978 3,133 3,012 VRLL’s asset heavy model has better gross margins than TCIEXP.
However, high other overhead expenses have resulted in lower
% of Realisation 75.5% 73.6% 72.0% 69.5% 55.9% 53.6% 53.5% 53.4%
EBITDA
YoY (%) 1% -1% -1% 8% 1% 5% -4%
Commission/Servicing Cost - - - - 200 229 230 186 TCIEXP doesn’t pay any commission to agencies to collate cargo.
VRLL has 166 agency branches in its network to provide
YoY (%) 0% 14% 1% -19%
incremental cargo to hubs.
Labour/Hamaali 133 136 136 143 287 237 320 361
Labour (Hamaali) cost for TCIEXP has remained stable given the
% of Realisation 1.2% 1.2% 1.1% 1.2% 5.5% 4.3% 5.5% 6.4%
variable nature
YoY (%) 2% 0% 5% 6% -17% 35% 13%
Rent 308 292 313 373 328 349 371 400 TCIEXP has added over 250 branches through FY17-20 while
% of Realisation 2.7% 2.5% 2.6% 3.0% 6.2% 6.3% 6.3% 7.1% keeping its rental cost under check. VRLL, on the other hand, has
reduced its branch count from 1024 to 829 in FY20.
YoY (%) -5% 7% 19% 10% 6% 6% 8%
Employee Costs 894 967 1004 1212 778 1000 1019 1014
VRLL has more drivers on its rolls resulting in higher fixed
% of Realisation 7.8% 8.2% 8.4% 9.9% 14.8% 18.0% 17.4% 18.0% employee cost. TCIEXP’s predominant employees base is located
YoY (%) 8% 4% 21% 11% 29% 2% -1% in branches/hubs. These employees have a high variable pay
structure (volume driven incentive).
Other expenses^ 498 475 454 517 81 82 75 76
% of Realisation 4.4% 4.0% 3.8% 4.2% 1.5% 1.5% 1.3% 1.4%
YoY (%) -5% -4% 14% -19% 1% -9% 2%
EBITDA per Ton 941 1,209 1,392 1,444 651 683 713 594
TCIEXP’s improving truck fill factor, sustained price
% of Realisation 8.3% 10.2% 11.6% 11.8% 12.4% 12.3% 12.2% 10.5%
increase and low overhead costs have driven 15% CAGR
YoY (%) 28% 15% 4% -8% 5% 4% -17% (FY17-20) in EBITDA/Ton
* Adjusted for INDAS 116; ^VRLL’s other expenses are assumed and not comparable to TCIEXP
Estimated cost apportion for VRL’s GT segment; Source: Company, Spark Capital Research

Page 5
 TCI Express | Company Update

Flexible Scale up vs Control over fleet - TCIEXP’s steady price hike and improving load factor have reduced its overall transportation cost

Transportation Expenses as % of Revenues

TCI EXPRESS <LOGO>

75.5%
73.6%
0.9% 72.0% TCIEXP reported a tonnage growth of 8% CAGR
0.8% through FY17-20 despite increasing realisation
3.7% 69.5%
0.7% indicating healthy pricing power despite
4.2%
3.6% 0.7% competitive intensity. Expect TCIEXP to sustain
70.8% pricing power with its clientele and favourable
3.3%
68.7% 67.7% terms with it vendor base
65.4%
FY17 FY18 FY19 FY20

Road Freight Expenses Air Freight Expenses Other transportation expenses Transportation Expenses
Improving truck fill factor and steady price
hikes have reduced the proportion of
transportation cost
56.1% 53.7% 56.1% 55.4%

3.0% 3.6% 3.2%

5.9% 3.4% 5.5%
6.0% 6.0%
7.7% 5.5% 6.1%
6.4% TCI EXPRESS <LOGO>

26.2% 27.5% 27.2%

25.9%
While VRLL’s asset heavy model has lower
7.1% 6.3% 8.4% 7.1% susceptibility to truck spot rates, the company has
failed to demonstrate pricing power resulting in
FY17 FY18 FY19 FY20
Lorry hire Vehicle operation- diesel cost
limited gross margin expansion. Furthermore,
Vehicle running, repairs and maintenance (net of insurance claims) Bridge and toll charges VRLL’s hub-to-hub truck fill factor is ~95-100%
Stores and spares consumed Tyres, flaps and re-treading limiting further scope of improving operating
Vehicle taxes Insurance leverage.
Estimated apportioned cost for VRL’s GT segment; Source: Company, Spark Capital Research

Page 6
 TCI Express | Company Update

Other Operating Expenses - TCIEXP’s model has enabled better operating leverage than asset-heavy service provider

Rent as % Revenues Hamaali & Other Operating Cost as % Revenues Employee Cost as % Revenues

Employee cost
increase led by
2.7% 3.0% 9.9%
2.5% 2.6% steady annual 7.8% 8.2% 8.4%
2.1% 1.9% 1.9% 1.9% hikes and
addition of
manpower to
manage new
FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 branches FY17 FY18 FY19 FY20

Branches 550 650 700 800 Employees (Nos) 2,224 2,608 2,747 2,905

Labour cost has remained stable at 2% of revenues over last four years Avg Employee
Hubs 28 28 28 28 0.26 0.30 0.32 0.36
cost (Rs. Mn)
Rent per facility
0.36 0.32 0.36 0.38 YoY (%) NA 14% 7% 12%
p.a. (Rs. Mn)

9.4% 9.7% 18.0% 17.4% 18.0%

9.3%
7.1% 8.4% 14.8%
6.2% 6.3% 6.3%
Employee cost
predominantly
towards
addition of
drivers for fleet
FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20

Branches 884 911 892 859 Employees (Nos) 20,986 19,781 19,030 19,698
Hamaali cost accounts for 6% of revenues while Agency commission Avg Employee
Hubs 47 47 46 47 0.10 0.13 0.15 0.16
(paid to agency branches) accounts for 3% cost (Rs. Mn)
Rent per facility
0.96 1.00 1.15 1.36 YoY (%) -4% 28% 13% 6%
p.a. (Rs. Mn)

Page 7
 TCI Express | Company Update

TCIEXP’s asset light model expected to benefit from improving operating efficiencies

75.5% -360bps Expect transportation cost to be a key lever to margin improvement as we expect
73.6%
72.0%
69.5% 69.0% 1. Branch addition to provide incremental volumes to hubs
66.8% 65.9%
2. Deploying larger trucks as volumes increase on key routes thereby reducing per unit cost of
8,607 8,691 8,625 8,538 8,539 8,515 8,652 transportation

FY17 FY18 FY19 FY20 FY21E FY22E FY23E 3. MoRTH notification permitting increase in height of containerized truck body by 8-9 inches (potential
addition of 2-2.5T in a 14T truck), thereby providing additional volume per truck without a
Total Transportation expenses per ton (Rs.) % of Realisation
commensurate increase in costs.

420bps
-10bps
3.5% 15.9%
14.9%
3.0% 3.0% 2.9%
2.7% 2.5% 2.6%
11.6% 11.8% 11.9%
10.2%
8.3%

308 292 313 373 433 382 381

FY17 FY18 FY19 FY20 FY21E FY22E FY23E 941 1,209 1,392 1,444 1478 1903 2092

Rent per Ton % of Realisation FY17 FY18 FY19 FY20 FY21E FY22E FY23E

EBITDA per Ton % of Realisation

9.9% 10.3% 9.9% 10.0%

7.8% 8.2% 8.4% EBITDA per ton has grown at 15% CAGR
through FY17-20 predominantly on the back
Expect employee cost per ton to remain high of improving truck fill factor (~82% in FY17 to
led by annual hikes and recruitment of ~85% in FY20). Expect EBITDA margins to
894 967 1004 1212 1269 1259 1316
additional manpower for its new branches improve further through FY20-23E on the
FY17 FY18 FY19 FY20 FY21E FY22E FY23E back of transportation operating efficiencies
(360bps).
Employee Costs per Ton (Rs.) % of Realisation

Source: Company, Spark Capital Research

Page 8
TCI Express | Company Update

ASSET LIGHT MODEL ADVANTAGE

▪ Post GST benefits

▪ Cost comparison

STRENGTHENING NETWORK AND FLEET

▪ Branch network expansion

▪ Owned Sorting Centers
▪ Benefits of Government amendment to fleet height

PEER COMPARISON

▪ Operational metrics
▪ Financial metrics

FINANCIAL ANALYSIS

Page 9
TCI Express | Company Update

Express Logistics – Optimal leveraging on network has been the key success factor

Key Enablers for Express Logistics

Major Consumption ▪ Express Logistics expected to grow at GDP multiplier of 1.5x-2x
Clusters
▪ Top 16 clusters in India, across which transportation network is designed,
accounts for 45% of express logistics market.
Chandigarh ▪ ~70% of TCI Express’s tonnage is transported to Metros and Tier 1 cities.

Delhi
Kanpur Focus on expanding network across board
Jaipur
Lucknow Patna
2012 2020

Jabalpur
Ahmedabad Bhopal Indore 800 branches catering to 40,000
Kolkata TCI Express 550 branches with 28 hubs*
Vadodara locations – 28 hubs
Nagpur
Surat
Mumbai
Pune Hyderabad Critical Success Factors: 413 branches catering to 33,739 582 branches catering to
Vizag Blue Dart
locations 34,800+ locations – 21 hubs
▪ Network ▪ Consistency of
Presence service levels
608 branches catering to 19,000
and Catering to 6,700 pin codes – 17
▪ Utilisation of Gati pin codes – 16 express hubs and
improvement express distribution center
Bangalore network 61 distribution warehouses
in TAT
Chennai

▪ Reliability of ▪ Vendor 617 branches catering to 22,110

Safe Express NA
line haul Management pin codes – 76 hubs

*FY16 post demerger

TCIEXP intends to increase its branch network from 800 to 1000 over next two years (predominantly in Metros and Tier 1 cities) as it aims to drive volumes through new SME
clientele

Page 10
 TCI Express | Company Update

Owned sorting centre to strengthen existing infrastructure while new branches to drive tonnage growth

Deeper penetration-led incremental volumes from new branch addition

▪ TCIEXP intends to increase its branch The benefits of branch addition :

network from 800 to 1000 over next two
years to fuel tonnage growth.
▪ The new branches would be setup if an
existing branch is operating at full
capacity (handles over 200 SME
customers) or if potential customer can
be added to fold incase a new branch is
setup closer to industrial cluster.
▪ The company does detailed assessment
of cargo availability at new branch
location to ensure faster breakeven
(within two months).
▪ The branch initial set-up cost (500-1000
sq.ft) is estimated to be Rs. 50k with
monthly upkeep costs of Rs. 25-30k per
month.
Source: Company, Spark Capital Research
▪ New branches are expected to increase penetration in Metros
and Tier 1 cities with an aim to add volumes through new SME
clientele. Furthermore, the addition of new SME clientele is
expected to improve overall realisation (quicker pass through of
pricing) and improve working capital (large proportion of
prepaid/paid on delivery customers)
▪ Improve the branch-to-hub efficiency as smaller pickup vehicle
can collect cargo from multiple branches to replenish hubs at
regular intervals (ERP driven cargo collation). Furthermore, new
branches are expected to improve on-time pickup in congested
cities.
▪ Incremental cargo from new branches is expected to aid line
haul truck fill factor (presently at ~85% ). Moreover, higher
volumes enable company to increase its line haul truck
capacity from 9T to 14T thereby reducing the unit cost of
transportation.

Owned Sorting centers expected to reduce turnaround time by over 50%

1,200 Rs. 4bn Capex outlay 40% TCIEXP owns 8 out of its 28 sorting centers. The
35% company aims to incur capex of Rs. 4bn over five
1,000 years to setup more facilities to meet its long-term
27% 30% Efficiencies with own hubs:
35% 25% growth aspirations.
800
20% 25%
Sorting Centers schedule: ▪ Reduce turnaround time by over
600 20% 50%
▪ Gurgaon (0.2mn sq.ft) and Pune (0.15mn sq.ft) to
400 10% 9%
15% be operational from Dec-20 (expected savings of ▪ Implement semi-mechanization to
10% Rs. 30mn per annum post commissioning). Cost improve hub operating efficiencies
200 incurred - Rs. 0.6bn.
629 194 190 800 1,000 1,000
5% ▪ Capabilities to handle incremental
0 0% ▪ Land acquired in Indore & Nagpur and construction volumes over next 5 years
FY18 FY19 FY20 FY21E FY22E FY23E expected to commence shortly.
▪ Scouting for land in Chennai, Kolkata, and Mumbai
Capex (Rs. Mn) Capex as % of Gross Block
Source: Company, Spark Capital Research

Page 11
TCI Express | Company Update

Government notification permitting increase in height of containerized trucks to benefit TCIEXP

On July 1,2020 Government amended Rule-93 relating to the

dimensions of motor vehicles under the Central Motor Vehicle Existing height of vehicle Revised height of vehicle
Increase (Mtr)
Rules 1989. As per the notification, N category of goods (Mtr) (Mtr)
vehicles are permitted to increase height from 3.8m to 4m (~8-
9 inches). The notification was announced to standardize
dimensions of the Motor Vehicles to be in-line with 3.8 4 0.2 (8-9 inches)
international standards.

2,000
▪ 30% of 9T and 14T fleet has been modified
based on new government notification
providing additional carrying capacity of ~2-
1,000
2.5T per vehicle. The remaining 70% is
expected to be modified by FY22.
▪ Incremental cost to modify fleet to be
2,000
incurred by vendor. However, TCIEXP is likely
to share part of the benefits with its vendors.
Total Attached Fleet
▪ The recent amendment to increase truck height by 8-9 inches is
expected to accommodate additional ~2-2.5T in 14T vehicle and
~1.3-1.5T in 9T vehicle (~15% increase), thereby reducing the per
unit transportation cost. However, the benefits would be applicable
based on type of cargo carried (higher voluminous cargo to have
limited benefit).
▪ Expect addition of high cube trucks over medium-term to replace aged
fleet (older than 7 years).

Line haul fleet (9T and 12T fleet)

Branch to hub <9T fleet
Last mile (Smaller fleet)

Page 12
TCI Express | Company Update

ASSET LIGHT MODEL ADVANTAGE

▪ Post GST benefits

▪ Cost comparison

STRENGTHENING NETWORK AND FLEET

▪ Branch network expansion

▪ Owned Sorting Centers
▪ Efficiencies in Hub & Spoke model

PEER COMPARISON

FINANCIAL ANALYSIS

Page 13
TCI Express | Company Update

Express – TCI Express has shown consistent growth in tonnage and EBITDA margin improvement post GST

Key Surface Express focused companies have grown over 15% post GST through FY17-19

46% 28% 24%

33, 000

18% 20% 25, 000 50%

26%
35, 000 30% 25%

30, 000
18%

28, 000 16% 30, 000 Pre Post

16%
20, 000
40%

22% 25%

20%

FY14- GST GST

13%
25, 000
Revenue CAGR
23, 000
25, 000
19 (FY14- (FY17-
14%

30% 20%
14% 17) 19)
12%
20, 000
15, 000 15%

18, 000
12%

14% 20, 000

20% 15%

15, 000
10%

15, 000
9% TCI Express 11% 8% 17%
10, 000 10%
13, 000

8%

5% 5% 10% 10%
Gati KWE 9% 12% 5%
1% 1% 10, 000

5%
0%
10, 000

6%

-3% Spoton 19% 12% 30%

8,0 00
10,238

10,320

11,387

11,399

11,103

11,663

12,288

11,099

12,690

15,698
5,0 00 5%

3,012

3,047

3,707

4,684

6,004
6,632

7,503

8,851

9,426

9,881
0% 5%

1%
5,0 00 4%
5,0 00

3,0 00 Safexpress 13% 9% 19%

2%

0 0 -10% 0 0% 0%

Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
-2,000 0%

TCI Express Gati KWE Spoton Logistics Safexpress

EBITDA Margins are varied across peers due to different model adopted (Asset Intensity, WC days etc.) and industry catered

1,4 00 1,2 00 14. 0% 450 12. 0% 1,8 00 10. 0% 12. 0%

11.8% 8.2%
11.6% 9.9% 7.3% 9.7% 9.8%
9.5%
400

1,6 00

1,2 00 12. 0% 8.0 %

10.2% 1,0 00

350
10. 0%

8.6%
10. 0%

Pre Post
8.2% 1,4 00

7.9%
4.6% FY14- GST GST
EBITDA CAGR
300
1,0 00 10. 0% 6.0 %

8.2% 8.3% 800 7.0% 8.0 % 1,2 00 8.0 %

19 (FY14- (FY17-
250

800 8.0 %
6.1% 5.8% 4.0 %
17) 19)
1,0 00

2.0%
200

600 6.0 % 6.0 %

150
800

TCI Express 20% 9% 39%

600 6.0 % 2.0 %

100

400 4.0 % 600 4.0 %

141

270

383

121
400 4.0 %
50
0.0 %
Gati KWE -3% -2% -5%
-2.3% 400

Spoton - - -33%
1,190

1,213

1,123

1,544
0

200 2.0 % 2.0 %

200 2.0 % -2.0%

544

619

907

936

782

711

707

911

937

952

996
-69

200

-50

Safexpress 12% 2% 27%

0 0 0.0 % -100 0.0 % 0 -4.0% 0.0 %

Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
TCI Express Gati KWE Spoton Logistics Safexpress

Page 14
 TCI Express | Company Update

Express - Key Metrics Comparison

TCI EXPRESS GATI KWE SPOTON SAFEXPRESS

Consistent Returns led by improving margins
28.1% 27.8%
27.7% 27.3% 28.2% 28.6% 16.2% 10.5%
22.6% 21.6% 20.9% 8.7% 8.6%
RoCE (%) 14.1% 16.4% 7.9% 6.8% 6.5%
11.8% 10.6% 9.7%
-1.8%
-17.7%

31.8% 30.7% 29.5% 34.2% 30.8%

20.5%
RoE (%) 24.4% 23.9% 26.4% 25.7% 11.3%
9.6% 9.5% 8.7%
17.9% 18.0% 7.6% 7.1%
12.2% 10.7% 9.2% -1.3%
-48.8%

0.2 0.6 0.3

Net Debt 0.1 0.1 0.2
0.5 0.4 0.4 0.4 0.1
to Equity 0.3
(x)
(0.0) (0.1) (0.1)
(0.1) (0.1) (0.1)
(0.2) (0.2) (0.2) (0.2) (0.2)

OCF, Steady operating cashflows fund capex

Capex and
Cash 122 412 1536
171 147 259
109 88 118 113
629 141 217 98 1136 1146 1209
249 194 190 268 198 175 44 190 977 1197 221
381 156 137 227 208
35 510 160 440 18 24 97 107
523 739 775 808 84 895 792 647 159 256 97 147 177
476 335 344 433 431 -24 -70 -143 144
101 324 127 51 666

WC days 42 45 40 32 32 38 50 34 38 56 60 48 30 51 50 53 27 209 209 217 211 202 171

CC days 44 45 37 37 32 37 64 45 51 49 37 34 30 14 12 15 19 105 94 89 90 95 74

Healthy WC cycle compared to peers

48 59 11 12 13 8 23
23 52 50 46 7
13 13 18 27 26 22 20 21 14 28 32
87 77 116 106 103 97 103 97
56 58 55 64 58 59 66 72 62 65 67 65 62 74 64

Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Estimated; WC = Working Capital and CC = Cash Conversion; Source: MCA, Company, Spark Capital Research

Page 15
TCI Express | Company Update

ASSET LIGHT MODEL ADVANTAGE

▪ Post GST benefits

▪ Cost comparison

STRENGTHENING NETWORK AND FLEET

▪ Branch network expansion

▪ Owned Sorting Centers
▪ Efficiencies in Hub & Spoke model

PEER COMPARISON

FINANCIAL ANALYSIS

Page 16
 TCI Express | Company Update

Financial Metrics
Sustained growth from existing clientele coupled with incremental tonnage from
Expect revenue growth to be predominantly driven by healthy tonnage growth
new branches to drive tonnage growth of 17% through FY21-23E
1.2 25% 30%
14.0 29% 35% 25%
30% 1.0
12.0 14% 14% 20%
18% 25%
16% 0.8 10% 10% 15%
10.0 13% 13% 20%
15% 10%
8.0 0.6
10% -2% 5%
6.0 1% 1% 5% 0.4 0%
4.0 0% -5%
0.2 -12%
-11% -5% -10%
2.0 0.7 0.8 0.9 0.8 0.7 0.9 1.0
6.6 7.5 8.9 10.2 10.3 9.1 11.8 13.3 -10%
0.0 -15%
0.0 -15% FY17 FY18 FY19 FY20 FY21E FY22E FY23E
FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
Tonnage (Mn) YoY (%)
Revenue (Rs. Bn) Growth (%)

Source: Company filings, Spark Capital Research Source: Company filings, Spark Capital Research

Steady price hikes to improve overall realisation Margins to improve on the back of operating efficiencies

31.6% 32.5%
2.5 35.0%
13,500 3% 4% 28.9% 29.4%
26.4% 30.0%
3% 3% 4% 2.0 24.9%
13,000 23.5% 23.1%
22.1% 25.0%
3% 3% 3%
12,500 1.5 15.9% 20.0%
3% 14.9%
12,000 2% 11.6% 11.8% 11.9% 15.0%
1% 1.0 10.2%
7.8% 8.2% 8.3%
2% 10.0%
11,500 1%
1% 0.5
5.0%
11,000 0.5 0.5 0.6 0.9 1.2 1.2 1.1 1.8 2.1
1% 0.0 0.0%
11,407 11,801 11,978 12,285 12,375 12,747 13,129
10,500 0% FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
FY17 FY18 FY19 FY20 FY21E FY22E FY23E
EBITDA (Rs. Bn) EBITDA Margins(%) Gross Margins (%)
Realisation (Rs.) YoY (%)
Source: Company filings, Spark Capital Research Source: Company filings, Spark Capital Research

Page 17
 TCI Express | Company Update

Financial Metrics

Working capital cycle expected to remain healthy Capex to be funded with incremental operating cashflows

2,038
45 40 32 32 38 40 37 37

1,598
1,207
1,163

1,124

1,000

1,000
58 64 58 59 65 59 59

980
55

800
725

704
629
510
485

460
412

406
381
(13) (18)

194

190
171
(22) (22) (22)

122
(27) (26)

109
(27)

88
FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E

Debtor days Creditor days OCF*(Rs. Mn) Capex (Rs. Mn) Cash (Rs. Mn)
WC days

Source: Company filings, Spark Capital Research Source: Company filings, Spark Capital Research

Returns profile to remain healthy despite capex spend Healthy OCF/Invested capital

31.8% 32.0% 30.8%

30.7%
29.5% 29.2% 29.4%
27.8% 30.0%
26.4% 26.6% 27.6%
28.0% 26.3% 26.6%
24.4% 23.9% 28.2% 28.6%
27.7% 27.3% 27.4% 24.9%
26.4% 26.0%
21.2%
24.0% 22.9%
22.6%
21.6%
20.8% 22.0%

20.0%
FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
OCF/IC (%)
RoCE (%) RoE (%)
Source: Company filings, Spark Capital Research Source: Company filings, Spark Capital Research

Page 18
 TCI Express | Company Update

Financial Summary
Abridged Financial Statements
Rs. mn FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E
Profit & Loss
Revenue 6,586 6,632 7,503 8,851 10,238 10,320 9,136 11,763
Gross profit 1,456 1,556 1,737 2,207 2,704 2,978 2,682 3,712
EBITDA 516 544 619 907 1,190 1,213 1,091 1,757
Depreciation 60 58 43 52 65 78 83 94
EBIT 456 486 576 854 1,125 1,135 1,009 1,663
Other Income 3 1 14 21 32 44 49 52
Interest expense 58 53 24 38 38 9 5 3
Exceptional items 0 0 0 0 0 0 0 0
PBT 402 435 565 838 1,119 1,170 1,053 1,711
Reported PAT 265 284 375 584 728 891 788 1,281
Adj PAT 265 284 375 584 728 891 788 1,281
EPS (Rs.) 7.0 7.5 9.8 15.3 19.0 23.2 20.6 33.4
Balance Sheet
Net Worth 1,154 1,230 1,608 2,068 2,672 3,373 4,078 5,137
Deferred Tax 0 24 33 43 55 41 41 41
Total debt 6 408 316 407 98 40 30 30
Other liabilities and provisions 57 92 115 275 241 241 219 269
Total Net worth and liabilities 1,216 1,753 2,072 2,793 3,066 3,696 4,368 5,476
Gross Fixed assets 388 806 1,164 1,814 1,979 2,181 2,981 3,981
Net fixed assets 146 637 971 1,620 1,731 1,854 2,572 3,478
Capital work-in-progress 0 91 79 0 14 111 111 111
Goodwill 0 0 0 0 0 0 0 0
Investments 0 0 0 0 13 9 9 9
Cash and bank balances 249 109 88 122 171 412 460 406
Loans & advances and other assets 34 94 175 153 230 271 264 280
Net working capital 788 822 759 898 908 1,038 951 1,192
Total assets 1,216 1,753 2,072 2,793 3,066 3,696 4,368 5,476
Capital Employed 1,160 1,661 1,957 2,518 2,825 3,454 4,149 5,208
Invested Capital (CE - cash - CWIP) 911 1,461 1,791 2,396 2,641 2,931 3,577 4,690
Net debt -243 299 228 285 -73 -372 -431 -377
Cash Flows
Cash flows from Operations (Pre-tax) 613 485 725 980 1,163 1,124 1,207 1,598
Cash flows from Operations (post-tax) 476 335 523 739 775 808 942 1,168
Capex 35 510 381 629 194 190 800 1,000
Free cashflows 441 -175 143 110 581 618 142 168
Free cashflows (post interest costs) 384 -227 118 72 544 609 137 165
Cash flows from Investing -32 -508 -391 -628 -256 -595 -800 -1,000
Cash flows from Financing -63 350 -153 -76 -470 -258 -94 -221
Total cash & liquid investments 249 109 88 122 171 412 460 406

Page 19
 TCI Express | Company Update

Financial Summary

FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E

Key variables
Tonnage (mn) 0.60 0.66 0.75 0.85 0.84 0.74 0.92
Realisation/Ton (Rs.) 11,116 11,407 11,801 11,978 12,285 12,375 12,747
EBITDA/Ton (Rs.) 909 941 1,209 1,392 1,444 1,478 1,903
Growth ratios
Revenue 9.6% 0.7% 13.1% 18.0% 15.7% 0.8% -11.5% 28.8%
EBITDA 7.0% 5.4% 13.8% 46.5% 31.3% 1.9% -10.0% 61.0%
Adj PAT 3.6% 7.4% 31.8% 55.8% 24.7% 22.3% -11.5% 62.5%
Margin ratios 3.50% 3.18%
Gross 22.1% 23.5% 23.1% 24.9% 26.4% 28.9% 29.4% 31.6%
EBITDA 7.8% 8.2% 8.3% 10.2% 11.6% 11.8% 11.9% 14.9%
Adj PAT 4.0% 4.3% 5.0% 6.6% 7.1% 8.6% 8.6% 10.9%
Performance ratios
Pre-tax OCF/EBITDA 118.6% 89.2% 117.1% 108.1% 97.7% 92.7% 110.6% 91.0%
OCF/IC (%) 52.2% 22.9% 29.2% 30.8% 29.4% 27.6% 26.3% 24.9%
RoE (%) 24.4% 23.9% 26.4% 31.8% 30.7% 29.5% 21.2% 27.8%
RoCE (%) 27.7% 22.6% 21.6% 27.3% 28.2% 28.6% 20.8% 27.4%
RoCE (Pre-tax) 41.9% 34.6% 32.6% 39.1% 43.3% 37.5% 27.8% 36.6%
RoIC (Pre-tax) 47.0% 41.0% 35.4% 40.8% 44.7% 40.7% 31.0% 40.2%
Fixed asset turnover (x) 17.8 11.1 7.6 5.9 5.4 5.0 3.5 3.4
Total asset turnover (x) 5.9 4.5 3.9 3.6 3.5 3.1 2.3 2.4
Financial stability ratios
Net Debt to Equity (x) (0.2) 0.2 0.1 0.1 (0.0) (0.1) (0.1) (0.1)
Net Debt to EBITDA (x) (0.5) 0.5 0.4 0.3 (0.1) (0.3) (0.4) (0.2)
Interest cover (x) 8.3 6.4 21.4 19.7 20.5 89.7 207.3 394.5
Cash conversion days 44 45 37 37 32 37 38 37
Working capital days 42 45 40 32 32 38 40 37
Valuation metrics
Fully Diluted Shares (mn) 38.0 38.0 38.3 38.3 38.3 38.3 38.3 38.3
Market cap (Rs.mn) 30,133
P/E (x) 113.0 105.2 80.4 51.6 41.4 33.9 38.3 23.5
P/OCF(x) 63.3 90.0 57.6 40.8 38.9 37.3 32.0 25.8
EV (Rs.mn) (ex-CWIP) 29,890 30,341 30,283 30,418 30,047 29,651 29,703 29,756
EV/ EBITDA (x) 57.9 55.8 48.9 33.6 25.3 24.4 27.2 16.9
EV/ OCF(x) 62.8 90.6 57.9 41.2 38.8 36.7 31.5 25.5
FCF Yield 0.4% 1.9% 2.1% 0.5% 0.6%
Price to BV (x) 26.1 24.5 18.7 14.6 11.3 8.9 7.4 5.9
Dividend pay-out (%) 0.0% 0.0% 8.2% 18.4% 15.3% 15.5% 8.8% 14.4%
Dividend yield (%) 0.4% 0.4% 0.5% 0.2% 0.6%

Page 20
TCI Express | Company Update

Crystal Ball Gazing

Over FY20-24E, expect TCIEXP’s revenue growth to be driven by 1) higher contribution from key geographies as it leverages on
established infrastructure (wide network covering ~40,000 pan-India locations), 2) modal shift of cost-sensitive volumes from air
express to ground express on account of high cost differential, 3) incremental demand for transit warehouses with shift towards
inventory on wheels, and 4) increasing demand for professionally-managed service providers over unorganized players. EBITDA
growth is expected to be driven by improving operating efficiencies.

Improving profitability to result in healthy returns

Healthy Revenue and EBITDA growth Limited rerating potential
over the medium-term despite aggressive capex

FY15-FY19 FY19-FY24E FY15-FY19 FY19-FY24E P/E multiple FY24E EPS Price target
Revenues CAGR 12% 8% RoE (%) 27.4% 26.7% 25x 46.5 1,175
Gross Margin 24% 30% RoCE (%) 25.5% 26.0%
EBITDA CAGR 23% 16% RoIC (%) 41.8% 39.1%
EBITDA margin 9.2% 13.7% Average 1 yr fwd
EPS CAGR 29% 20% PE (x) 28.3 -

Total Asset Turnover (x) 4.3 2.6 EV/EBITDA (x) 17.6 -

Total WC days 38 37 Peak 1 yr fwd

Pre-tax OCF/EBITDA (%) 106% 97% PE (x) 33.8 -

Post-Tax OCF as a % of IC 33% 27% EV/EBITDA (x) 21.3 -

Net Debt/EBITDA 0.1 (0.3)

TOTAL
Entry = Rs. 786 @ 23x Cumulative Dividends of PAT CAGR of ~20%, exit RETURN OF
FY22E EPS Rs. 16/share multiple of 25x 50%

Page 21
Exchange and Currency Performance SPARK RESEARCH
23 September 2020

Equity Performance (%) Chg. Chg. Currency Performance (%) Chg. Chg.
Global Indices from from Currency from from
Today 1m 3m 6m 12m YTD 52WH 52WL Today 1m 3m 6m 12m 52WH 52WL
Developed Developed
US (Dow Jones) 27,105 -3.0 4.1 41.4 0.6 -5.0 -8.3 48.8 Dollar Index# 94.0 0.8 -3.1 -8.6 -4.6 -8.7 2.4
UK (FTSE100) 5,863 -2.3 -6.1 12.9 -20.2 -22.3 -23.8 19.7 Pound 1.3 -2.5 2.2 10.4 2.5 -5.7 11.6
Japan (Nikkiei 225) 23,360 1.9 3.9 41.1 5.8 -1.3 -3.1 42.8 Yen 105.0 1.0 1.9 6.0 2.5 -6.5 3.7
Germany (DAX) 12,677 -0.7 3.4 42.0 1.7 -4.3 -8.1 53.6 Euro 1.2 -0.6 4.0 9.2 6.5 -2.5 10.1
BRICS BRICS
Brazil (IBOV) 96,957 -4.5 1.7 44.6 -7.5 -16.2 -18.9 57.2 Real 5.4 3.5 -3.1 -5.2 -23.2 -9.2 36.7
Russia (IMOEX) 2,892 -3.5 4.7 24.0 3.4 -5.1 -10.4 39.4 Ruble 76.2 -2.1 -9.2 4.5 -16.2 -8.1 25.1
India (Sensex) 37,734 -1.8 8.1 26.1 -0.7 -8.5 -10.7 47.2 Rupee 73.6 1.0 3.3 3.7 -3.6 -4.3 4.6
China (SHCOMP) 3,274 -3.1 10.4 19.3 8.9 7.3 -5.3 23.7 Renminbi 6.8 2.1 4.3 4.6 5.0 -5.5 0.4
South Africa (Jalsh) 53,294 -4.7 -1.7 32.3 -5.5 -6.6 -9.8 43.3 Rand 16.7 1.5 3.6 6.6 -10.9 -13.6 20.0
Asian Asian
HK (H S I) 23,717 -5.6 -3.2 4.0 -10.3 -15.9 -18.7 12.2 HK Dollar 7.8 0.0 0.0 0.1 1.1 -1.2 0.0
Korea (Kospi) 2,333 1.2 9.7 48.9 11.5 6.1 -5.1 62.0 Won 1,165.0 2.1 4.4 8.7 2.5 -10.0 1.2
Singapore (Straits) 2,463 -2.6 -6.3 2.2 -22.0 -23.6 -25.0 11.5 SG Dollar 1.4 0.4 2.0 7.0 1.0 -6.8 1.5
Malaysia (KLCI) 1,506 -4.5 -0.4 15.5 -5.7 -5.2 -6.9 24.7 Ringgit 4.1 1.0 3.5 7.6 1.1 -7.1 2.0
Indonesia (Jakarta) 4,934 -6.4 0.3 17.6 -20.8 -21.7 -22.3 26.1 Ind Rupiah 14,785.0 -0.8 -4.3 12.1 -4.7 -11.1 8.9

Commodities Performance (%) Commodities Performance (%)

Brent ($/bbl) 41.7 -6.1 -3.3 54.4 -35.2 -36.9 -41.9 160.7 Indonesian Coal ($/MT) 49.4 -1.8 -6.7 -26.3 -24.9 -26.3 0.0
WTI ($/bbl) 39.5 -6.8 -3.6 37.0 -25.8 -31.1 -35.0 69.6 S Africa Coal ($/MT) 61.0 -7.6 -6.9 -16.7 -26.4 NA NA
Copper ($/MT) 6,719 3.2 15.3 39.8 16.4 9.3 -1.8 46.8 Australia Coal ($/MT) 61.8 -0.6 -4.4 -11.9 -25.4 NA NA
Zinc ($/MT) 2,441 0.4 17.2 32.3 5.6 7.1 -5.9 37.7 Gold Spot $/Oz 1,905 -1.3 8.6 22.6 25.1 -8.2 31.7
Aluminium ($/MT) 1,739 0.8 10.6 11.6 -2.0 -2.4 -4.8 22.5 GOLD INDEX (Rs./10g) 50,623.0 -2.3 5.7 23.1 35.4 -9.6 36.9
Iron Ore ($/MT) 123 0.9 24.7 44.9 28.5 43.6 -2.9 62.0 Silver Spot $/Oz 24.4 -8.5 37.5 83.6 30.7 -18.4 109.2
Lead ($/MT) 1,864 -4.4 5.4 13.4 -11.7 -2.6 -17.8 18.4 MCX Silver (Rs./KG) 59,542.0 -9.3 22.4 59.3 30.3 -19.3 70.8

Page 22
Exchange and Currency Performance SPARK RESEARCH
23 September 2020

Particulars Today 1D 1M 3M 6M 12M NSE / BSE Category wise turnover

Liquidity (Rs. Bn)
Reverse Repo 3,656 3 6,366 0 210 146 FII DII Others 1,000
Repo - 10 19 19 19 46
MSF - 3 - 3 85 19 800

Rs. bn
Net liquidity* (3,418) (3,795) (6,040) (5,960) (3,647) (477) 375
Money Market Rates Change in BPS 600

NSE MIBOR 6.78 (7) (55) (42) (99) (136) 126 474 417
453 400
1M CP 7.74 - 86 83 118 118 357 356
3M CP 7.44 - - - - - 200
397 86
6M CP 7.67 4 (34) 39 82 67 87 88 92 90
3M CD 7.26 - 11 (23) (87) (108) 97 94 110 97 135
-
6M CD 7.46 9 24 (19) (81) (101) 16-Sep 17-Sep 18-Sep 21-Sep 22-Sep 1M avg
12M CD 7.62 3 17 (25) (71) (104)
Bond Market Change in BPS
India 10 yr 6.01 (0) (8) 13 (25) (78) Nifty Top 10 Deliveries
US 10 yr 0.66 (0) 4 (4) (18) (106) Rank Company Delivery % 30D Del. % Price Chg
Spread (India 10Y-US10Y) 535
1 HINDUSTAN UNILEVER LTD 57.1 54.5 -0.5%
India 10YR AAA corp 6.77 0 6 (24) (81) (117)
Spread (India 10Y-AAA10Y) 76 2 IDFC LTD 54.8 52.8 0.2%
91D T.Bills 3.32 9 5 (9) (155) (200) 3 HOUSING DEVELOPMENT FINANCE 43.9 50.5 -1.9%
1Y T.Bills #N/A N/A #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! 4 INFOSYS LTD 41.4 44.9 -0.2%
Call rate 3.40 (3) (3) (17) (160) (197) 5 KOTAK MAHINDRA BANK LTD 41.0 42.1 -1.3%
LIBOR, MIFOR Change in BPS 6 POWER GRID CORP OF INDIA LTD 40.5 42.2 -1.0%
LIBOR 0.16 (7) (12) (22) (6) (16) 7 ULTRATECH CEMENT LTD 39.4 37.6 0.1%
MIFOR 4.09 (7) (26) (64) (66) (143) 8 LARSEN & TOUBRO LTD 39.1 37.0 -2.9%
OIS 3.73 (2) (7) (9) (23) (75) 9 ITC LTD 36.8 43.1 -0.9%
12m OIS fwd 3.82 (1) (5) 18 (78) (131)
10 UNITED SPIRITS LTD 36.4 33.7 -1.3%
* Positive number represents liquidity deficiency/Negative number represents surplus – in the system

Market Activity FII & DII - Provisional (INR Bn) Bulk Deals (INR Mn)
Last 5 Day FII Buy FII Sell Net DII Buy DII Sell Net Date Script Client Name Type Price
22-Sep-20 38.1 58.8 -20.7 49.6 40.8 8.8 22-Sep-20 MAJESCO UNIFI WEALTH MANAGEMENT LTD BUY 2,06,000 779.1
21-Sep-20 52.3 57.7 -5.4 43.3 48.5 -5.2 22-Sep-20 MFSL MAX VENTURES INVESTMENT HOLDINGS PRIVATESELL
LIMITED 20,80,000 600.1
18-Sep-20 199.3 197.3 2.1 62.5 63.5 -1.0 22-Sep-20 REPCOHOME FIDELITY FUNDS ASIAN SMALLER COMPANIES POOL
BUY 4,20,288 150.3
17-Sep-20 45.8 48.3 -2.5 38.8 49.5 -10.7 22-Sep-20 BAJAJELEC BARODA INDUSTRIES PRIVATE LIMITED BUY 3,24,000 462.9
16-Sep-20 49.8 47.2 2.6 42.6 44.7 -2.1 22-Sep-20 BAJAJELEC KIRAN SHEKHARKUMAR BAJAJ SELL 3,24,000 462.9

Page 23
Spark Focus Stocks SPARK RESEARCH
23 September 2020

Delivery Volume

Delivery Volume
% inc/dec to 30D

% inc/dec to 30D
PE (All sectors) PE (All sectors)
Returns (%) EV/EBITDA (x) Returns (%) EV/EBITDA (x)

Delivery %

Delivery %
& P/ABV (Banks) & P/ABV (Banks)

Rating

Rating
('000)

('000)
Price

Price
avg

avg
Company Company
1D 1M 3M 1Y FY19 FY20E FY19 FY20E 1D 1M 3M 1Y FY19 FY20E FY19 FY20E

AgroChemicals Cement, Building Material & Real Estate

PI INDUSTRIES LTD 1896 (6.9) (4.7) 23.2 51.6 201.6 (1.0) 56.0 48.8 38.2 34.1 27.1 Add DALMIA BHARAT LTD 763 (0.8) (1.5) 28.9 (3.9) 44.1 (0.9) 48.6 51.4 57.9 9.3 8.4 Buy

COROMANDEL INTERNATIONAL LTD 801 (1.2) 0.6 9.3 91.5 206.0 (1.0) 41.2 21.2 19.0 12.6 12.6 Buy ASTRAL POLY TECHNIK LTD 1072 (4.9) (13.5) 19.6 (11.4) 57.5 (1.0) 52.1 89.1 56.0 45.6 33.9 Reduce

Automobiles & Logistics CENTURY PLYBOARDS INDIA LTD 168 (8.6) 18.3 39.4 22.3 151.8 (1.0) 40.0 23.4 17.4 13.9 10.3 Buy

AMARA RAJA BATTERIES LTD 710 (6.8) (4.1) 6.6 6.3 187.0 (0.3) 21.7 25.7 19.5 12.7 10.9 Buy KAJARIA CERAMICS LTD 497 (3.6) 8.6 26.6 (14.8) 661.8 (0.9) 87.3 36.6 28.8 18.5 17.4 Buy

ASHOK LEYLAND LTD 74 (6.6) 7.4 36.4 7.6 9641.6 0.2 10.1 12.2 56.6 7.4 20.6 Buy RAMCO CEMENTS LTD/THE 707 (5.2) (3.2) 11.5 (6.6) 242.7 0.1 19.8 35.8 24.5 17.9 13.8 Sel l

MAHINDRA LOGISTICS LTD 327 (4.7) (12.4) 15.4 (4.0) 36.4 (1.0) 55.6 35.0 40.1 19.0 16.8 Buy SOBHA LTD 236 (7.4) (9.4) 1.3 (53.2) 175.0 (1.0) 49.3 13.0 11.1 8.9 5.7 Buy

MINDA INDUSTRIES LTD 324 (8.1) (5.4) 17.8 (3.5) 125.1 1.1 47.4 33.2 38.9 14.0 14.5 Buy Financials

VRL LOGISTICS LTD 162 (2.9) (1.7) 4.6 (39.3) 77.7 (1.0) 49.9 27.3 22.5 10.7 8.8 Add AU SMALL FINANCE BANK LTD 668 (8.1) (7.7) 30.8 3.6 445.8 67.7 72.7 7.9 5.9 7.9 5.9 Reduce

SUNDRAM FASTENERS LTD 406 (2.6) (12.6) 9.3 (10.3) 50.7 (0.3) 56.2 24.2 30.7 15.1 18.0 Add CHOLAMANDALAM FINANCIAL HOLD 376 (12.4) (6.6) 19.4 (17.3) 20.8 (1.0) 63.9 – – – – Buy

WABCO INDIA LTD 5525 (7.9) (21.3) (19.7) (9.5) 2.1 (0.6) 20.8 44.3 66.4 28.3 43.8 Sel l CHOLAMANDALAM INVESTMENT AND 231 (4.0) 1.6 12.9 (20.4) 3184.4 0.1 43.8 4.3 3.7 4.3 3.7 Buy

Consumption & Media CITY UNION BANK LTD 135 (6.1) 4.5 7.1 (36.6) 652.2 (0.4) 43.4 1.2 0.7 1.2 0.7 Buy

ADITYA BIRLA FASHION AND RET 130 (2.4) (11.3) (1.0) (34.4) 635.6 (0.9) 26.2 58.0 80.6 32.7 26.0 Add EQUITAS HOLDINGS LTD/INDIA 50 (9.0) (11.6) (9.4) (49.7) 1277.3 (0.8) 27.6 1.6 1.0 1.6 Under
1.0 Revi ew

BAJAJ CONSUMER CARE LTD 175 (8.0) (4.8) 14.9 (32.1) 227.2 0.2 37.0 15.7 15.0 11.9 11.7 Reduce FEDERAL BANK LTD 49 (5.9) (12.6) (10.0) (48.5) 6814.1 (0.2) 17.7 1.5 1.4 1.5 1.4 Buy

BERGER PAINTS INDIA LTD 561 (3.1) (1.1) 10.9 40.3 99.9 (0.7) 12.8 100.3 65.1 52.9 41.9 Reduce KARUR VYSYA BANK LTD 33 (7.7) (9.0) 18.7 (41.0) 661.6 (0.0) 38.1 0.3 0.2 0.3 0.2 Buy

VMART RETAIL LTD 2009 (6.1) (2.8) 12.7 (3.7) 14.6 17.6 58.1 44.6 52.9 22.0 14.0 Buy REPCO HOME FINANCE LTD 156 (6.3) 6.9 21.5 (51.6) 773.7 5.3 72.3 1.5 1.3 1.5 1.3 Buy

JYOTHY LABS LTD 143 (6.6) (5.6) 24.4 (11.6) 204.2 0.2 49.2 27.1 24.2 20.0 17.3 Buy SHRIRAM CITY UNION FINANCE 885 (9.1) (9.8) 32.4 (34.5) 39.0 1.8 54.2 1.7 1.5 1.7 1.5 Reduce

ZYDUS WELLNESS LTD 1783 (6.4) 10.0 39.8 8.3 42.1 3.0 38.0 50.3 – 56.5 25.7 Add SUNDARAM FINANCE LTD 1302 (0.3) (6.6) (4.7) (17.6) 61.2 (1.0) 84.4 3.7 3.4 3.7 3.4 Reduce

LA OPALA RG LTD 213 (4.8) 5.6 15.2 23.4 68.9 0.2 35.9 – – – – Add IT Services

SUN TV NETWORK LTD 480 (0.9) 1.1 18.9 4.9 403.5 (1.0) 13.4 11.9 11.2 5.4 5.3 Buy CYIENT LTD 395 (6.5) 1.5 75.8 (12.3) 169.1 (0.8) 29.0 10.2 11.8 6.3 6.8 Buy

WONDERLA HOLIDAYS LTD 147 (11.6) (19.1) 7.1 (48.4) 84.7 (1.0) 64.4 25.5 20.2 11.2 10.0 Buy TEAMLEASE SERVICES LTD 2137 (10.1) (7.1) 23.0 (23.3) 19.8 (1.0) 64.3 43.7 42.5 43.9 35.6 Buy

V.I.P. INDUSTRIES LTD 296 (9.8) 3.9 10.8 (35.6) 178.6 (1.0) 25.3 41.8 35.6 27.3 16.9 Add INTELLECT DESIGN ARENA LTD 208 (2.7) 10.9 76.4 1.1 154.2 1.1 57.7 14.7 39.2 13.9 18.6 Buy

Capital Goods & Infra REDINGTON INDIA LTD 108 (9.2) (6.5) 30.3 (6.2) 177.9 (0.5) 54.4 8.9 10.4 5.5 4.8 Buy

AIA ENGINEERING LTD 1792 (4.0) 2.3 11.4 8.6 10.3 (1.0) 47.9 29.9 26.8 22.9 21.7 Buy Pharma

AHLUWALIA CONTRACTS LTD 243 (5.0) (3.4) 24.2 (21.7) 12.8 (1.0) 40.5 16.4 16.3 8.2 7.9 Add APOLLO HOSPITALS ENTERPRISE 1789 (2.1) 6.7 28.0 21.8 407.9 0.4 28.8 88.1 65.3 21.8 14.9 Buy

ASHOKA BUILDCON LTD 65 (9.0) (6.4) (4.2) (40.3) 565.3 (0.9) 33.8 (32.6) 9.9 6.3 5.3 Add BIOCON LTD 422 (7.0) 7.1 8.9 85.1 1224.4 (0.8) 24.5 48.7 38.5 24.5 18.4 Buy

BLUE STAR LTD 650 2.7 17.1 27.6 (17.7) 65.8 0.0 46.5 41.6 33.3 23.1 19.9 Reduce DR LAL PATHLABS LTD 1804 (9.1) (2.2) 15.1 37.0 23.8 (1.0) 38.7 64.2 48.0 41.2 31.3 Add

CARBORUNDUM UNIVERSAL LTD 257 (5.9) (8.2) (1.7) (16.8) 74.9 (0.4) 42.8 24.5 20.7 13.7 12.3 Add GRANULES INDIA LTD 353 (3.4) 12.0 70.9 228.9 1251.8 (0.8) 25.9 13.9 9.5 9.1 6.0 Reduce

ELGI EQUIPMENTS LTD 246 2.5 8.8 45.1 (4.4) 118.6 (1.0) 57.5 42.2 42.6 23.0 21.6 Sel l NARAYANA HRUDAYALAYA LTD 327 (2.9) (3.6) 19.5 39.2 23.8 (1.0) 41.8 113.9 41.6 25.7 16.1 Buy

KNR CONSTRUCTIONS LTD 247 (8.4) (5.0) 13.4 7.0 63.6 (1.0) 51.9 13.7 11.1 8.3 6.7 Buy SYNGENE INTERNATIONAL LTD 556 (2.1) 15.1 39.4 74.9 554.6 (0.9) 47.4 40.6 31.0 23.9 19.6 Buy

TRIVENI TURBINE LTD 69 (6.6) (9.7) (7.4) (25.7) 645.9 (0.9) 92.2 31.0 23.6 20.3 17.7 Buy Oil & Gas

V-GUARD INDUSTRIES LTD 168 (2.8) (2.8) (2.9) (25.0) 373.0 1.0 51.0 55.7 42.3 41.6 30.5 Reduce GUJARAT GAS LTD 307 (3.3) (4.7) 5.3 76.0 333.3 (1.0) 45.1 40.9 20.0 19.1 11.2 Sel l

VOLTAS LTD 658 (3.2) (0.2) 19.2 (1.4) 195.7 (1.0) 12.8 42.0 36.7 35.6 30.5 Reduce PETRONET LNG LTD 220 (3.6) (11.7) (16.2) (15.8) 1312.1 0.1 45.3 18.7 15.8 11.0 8.0 Add

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Spark Recommendation History SPARK RESEARCH
23 September 2020

Rs. Report Date CMP (Rs.) TP (Rs.) Recommendation

TCI Express – 3 Year Price and Rating History 28-Jul-20 722 770 Buy
1,000
12-May-20 607 685 Buy
800 29-Jan-20 830 910 Buy
06-Nov-19 795 855 Buy
600 01-Aug-19 572 660 Buy

400 Price 29-May-19 678 760 Buy

13-Feb-19 621 750 Buy
Target
200 06-Nov-18 607 750 Buy
06-Aug-18 650 750 Buy
0
30-May-18 541 620 Buy
Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20
05-Feb-18 495 600 Buy

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Spark Disclaimer (1/2) SPARK RESEARCH
23 September 2020

BUY Stock expected to provide positive returns of >15% over a 1-year horizon REDUCE Stock expected to provide returns of <5% – -10% over a 1-year horizon
Absolute Rating
Interpretation
ADD Stock expected to provide positive returns of >5% – <15% over a 1-year horizon SELL Stock expected to fall >10% over a 1-year horizon

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No
of the research report

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Spark Disclaimer (2/2) SPARK RESEARCH
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