Target: ₹940
CMP: €828.90
We downgraded TCI Express (TCIE) to Neutral (from Buy) in October 2024 following its Q2 2025 results, citing concerns over volumes and profitability. TCIE’s business performance and volume growth have been impacted by additional cost pressures in the Air Express division, increased competition and slower growth in key sectors such as manufacturing, automotive and textiles.
According to our channel check, volume growth was subdued in Oct-Nov 24, which could also lead to weak performance in Q3 2025 for TCIE. Allcargo Gati, an express logistics company of TCIE, reported a 13 percent month-on-month volume decline in November 24 (2 percent year-on-year growth).
In the Oct-Nov 24 period, Gati reported volume growth of just 3 percent year-on-year, pointing to subdued demand so far in the third quarter of 2025. While the third quarter holiday season brought some quarter-over-quarter volume growth for express logistics companies , their year-over-year performance remains weak, and this trend is expected to continue for the remainder of FY25.
While the long-term outlook for surface express services remains positive, short- to medium-term headwinds such as increased competition, weak rural demand, a slowdown in consumption and high inflation are likely to weigh on volumes.
