TCI EXPRESS Q2FY23 Earnings Call Highlights
During the quarter, saw an overall improvement in output for the month of July with marginally declined in August, primarily due to declining manufacturing and mining sector.
TCI Express being the market leader in express trucking logistics delivered the highest quarterly revenue of INR 300 crores, registering a growth of 22.2% year-on-year and 6.8% on a sequential basis. The top line growth was primarily driven by the SME customers higher volume of services.
Automation of the sorting centers also substantially increased the daily capacity by reducing the passive holding time and the labor involvement resulting in enhancement of complete operational efficiency and strong sustainable margin.
EBITDA for the quarter was INR 54 crores with a strong margin of 17.2% as compared to 15.3% previous quarter. EBITDA margin was primarily on account of higher capacity utilization and operational efficiencies.
During H1, have incurred a total CapEx of INR 50 crores, which have been primarily spent towards the purchase of land in Kolkata and also network expansion by adding a growing market. The automation and the digitization will enable to be much more efficient and in continuation, deliver superior customer experiences to enhance also the operational efficiencies.
By leveraging asset-light structure with automation and digitalization, continue to enhance competitive position as a leading provider of express services. Newly launched services are also in a growing state, and expect these services offerings to contribute productively to the top line in the forthcoming quarters, enabling to deliver higher margin levels.
Will continue to invest in technology and investment automation to drive a more efficient operation and provide a superior customer service.
Tonnage numbers in this quarter for this quarter is 247,000 tonnes and in half year, it is 477,000 tonnes.
Working capital days have increased by almost 9 days, in Q3, it will be normalized back to kind of like 48 to 50 days in a receivable days and 35 days in creditor side. So net working capital cycle will be back to 14 to 16 days.
Don't see there's a slowdown as such compared to other sectors.
Gurgaon sorting centre been performing very well. Seeing maximum impact of automation, looking at expanding automation at other centres as well. Goal is to cover major 10 to 11 in the next 4 to 5 years.
Had a halting time right now in the range of 20 to 24 hour on both ends, like origin sorting center and destination sorting center. Now able to reduce their edge. Now have reduced the holding time on a location fee. That means their trip will be increased in a particular month. So they will be saving on their fixed costs, like, again, driver salary and insurance and truck cost efficient everything they will be saving because and their inflow will be increased. Also able to reduce the labor component on the center.
High turnaround time is doubling the capacity of this existing center. Can be like process of double triple cargo in the same center by arranging or managing this speed of machine because this now is a completely automated one.
The load factor in this quarter is 85%.
Will certainly achieve 18% to 20% revenue growth for the full year. Same way, looking for FY '24. Obviously want to enhanc margin level. So margin level in this year, planning to have on full year basis 17.5% and then next year again in the range of 18% plus.
Just doing the pharma cold chain business. Not doing other businesses of food or other grocery items. Not doing the warehousing. Just doing the taking refrige truck, we are moving. So margin level in the truck is also in the range of 18% to 20%, and are doing for only pharma customers.
Volume growth this quarter, year-on-year basis was 12.5%. Price increase hardly is 1% of that.
Auto is a major contributor and retail sector because this is a festival season, the pre Deepawali has gone. So retail and lifestyle products and electronic items, they are a major contributor in that. And pharma is slightly kind of flat.
Taken almost 1.5% price hike. And by year-end, targeting to have at least 2.5% to 3% price hike for the whole year.
16% of overall revenue is from value added services in H1FY23.
In H1, added almost 22 branches and majorly in North and West and the remaining 6 months, planning to be open around 50 branches and in FY '24, again, want to open 100 branches.
52% of revenues is from SME and 48% from big customers.
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