TCI Express: Navigating Q2 FY26 with Strategic Shifts and Automation Focus

TCI Express Limited, a prominent player in India's express logistics sector, recently unveiled its unaudited standalone financial results for the second quarter and first half of fiscal year 2026. The company reported a total income of Rs. 312 crore for Q2 FY26, a marginal dip from Rs. 313.9 crore in the corresponding quarter of the previous year. EBITDA stood at Rs. 39 crore, reflecting a 12.4% margin, while Profit After Tax (PAT) was Rs. 25 crore, with an 8.1% margin. For the first half of FY26, total income reached Rs. 602.2 crore, with an EBITDA of Rs. 72.1 crore (12.0% margin) and PAT of Rs. 46.2 crore (7.7% margin). While overall revenue growth remained somewhat flattish, the company demonstrated resilience through strategic diversification and a strong focus on operational efficiencies.

The quarter saw varied performance across segments. The Surface Express division, historically the largest revenue contributor, experienced a slowdown. This was primarily attributed to the impacts of GST rate rationalization, moderation in certain industrial segments like paper and plastic, and a slower recovery in the MSME sector. However, TCI Express proactively countered this by expanding its network, adding 10 new branches in Q2 FY26 to strengthen last-mile connectivity. In contrast, the non-surface segments delivered robust growth, showcasing the company's successful diversification efforts. International Air Express recorded an impressive 40% year-on-year growth, driven by higher import-export volumes. The Rail Express segment grew by over 25% year-on-year, supported by 25 new branch additions and the adoption of appointment-based deliveries. The C2C Express vertical also expanded significantly, registering a 15%+ growth, fueled by new customer acquisitions and regional team expansions. The Pharma Cold Chain Express service continued to gain traction, leveraging rail transport for temperature-sensitive shipments.

Strategic Investments and Technological Advancement

TCI Express is heavily investing in infrastructure and technology to enhance its operational capabilities and future growth. A key initiative is the replication of automation technologies from its successful Gurugram and Pune sorting centers at upcoming facilities in Kolkata and Ahmedabad. Construction for these new centers has commenced, with automation expected to be operational by December FY27. The company also leased a significantly larger sorting center in Mumbai, tripling its existing capacity to improve efficiency and reduce costs in Western India. Furthermore, the implementation of a new Zoho CRM system is underway to streamline customer management and operational coordination, enhancing visibility and efficiency.

Beyond infrastructure, TCI Express is strategically expanding its service offerings and market reach. The company is actively pursuing growth in new verticals such as defense, electric vehicles (EV), and solar energy, aligning with emerging market trends. An agreement with an EV vehicle provider in South India is set to commence volumes from November. The company is also deploying 200 dedicated sales teams across various services to enhance customer engagement and drive business development. The goal is to increase the contribution of specialized segments like Rail Express, Air Express, C2C Express, cold chain, and E-commerce to 20–22% of total revenue over the next two to three years.

Financial Health and Outlook

Despite the moderate top-line performance, TCI Express maintained a disciplined focus on cost management and network productivity, which helped sustain margins within its guided range. The company continues to operate on an asset-light model, ensuring high network utilization and efficient cost control. A notable green flag is the company's debt-free status, coupled with strong liquidity, including liquid assets of Rs. 150 crore, which provides financial flexibility for future growth. The working capital cycle remains efficient, with receivable days at 60 and payable days at 40, resulting in a net working capital requirement of 20 days.

Management is optimistic about the upcoming quarters, anticipating an improvement in overall growth, especially in the surface segment, as the impacts of GST reforms subside and festive season demand continues. The company aims to improve its EBITDA margin to 12.5%-13% in the remaining two quarters of FY26, with a long-term target of over 15% as truck utilization improves to 85%-86% and revenue growth exceeds 10%. TCI Express is well-positioned to capitalize on emerging opportunities in India's logistics sector, driven by its robust infrastructure, technological advancements, and diversified service portfolio.