Tejas Cargo FY26: Growth Scales, Margins Ease

Tejas Cargo India Limited closed FY26 with strong top line momentum and visible operational scaling, while margins softened under the weight of higher market hiring and operating costs.

On a consolidated basis, total income for FY26 stood at 636.5 crore, up 25.2% from 508.2 crore in FY25. EBITDA rose to 117.2 crore from 103.7 crore, but the EBITDA margin moderated to 18.4% from 20.4%. Profit after tax increased to 20.9 crore from 19.1 crore, and PAT margin moved down to 3.3% from 3.8%.

Operationally, the company expanded its owned fleet to about 1,338 to 1,339 vehicles by March 31, 2026 and completed 120,530 trips during FY26, compared with 106,689 trips in FY25. Fleet utilization was reported at 82%, and revenue per trip improved by 9.3% year on year, supported by route optimization and an improving client and sector mix.

What drove FY26: Capacity expansion and better throughput

Tejas Cargo positions itself as a pan-India full truckload (FTL) logistics player with asset-backed execution. In FY26, it added 205 vehicles, including 40 car carrier trailers, to support capacity expansion across its core corridors and newer verticals. Management also stated in the earnings call that around 65 older vehicles were sold during the year due to higher maintenance costs.

The investor presentation highlights an operational stack built around a customized ERP, centralized monitoring, and IoT-based safety and security systems. The company cites tools such as GPS tracking, geofencing, ADAS and driver state monitoring, AI-enabled rear cameras on trailers, digital locks, and route deviation alerts.

The company also emphasizes an in-house maintenance backbone, with nine maintenance stations and a service yard at Sidhrawali, Haryana. It also operates a PESO-licensed captive fuel facility at Rewari, Haryana.

Financial summary (consolidated)

Revenue mix: Steel and cement gained share, e-commerce softened

The company provides a sector-wise revenue mix in the investor presentation, showing a clearer shift toward industrial and infrastructure-linked freight.

In FY26, logistics remained the largest bucket at 54.1%. Steel and cement increased to 24.7% from 19.7% in FY25, while e-commerce reduced to 7.6% from 13.5%. The newer cluster of coal, fly ash, car carrier and freight forwarding increased to 2.1% from 0.3%.

Management also discussed the ongoing build-out of newer verticals such as coal logistics, fly ash transportation, mining logistics, freight forwarding and car carrier operations.

Margins and cost headwinds: Market hiring and operating inflation

Despite the strong top line growth, FY26 saw margin moderation. Management attributed the decline in EBITDA margin to higher market hiring, rising toll costs, and higher insurance costs.

The earnings call adds more detail on the hybrid fleet approach. Market hiring contribution increased to around 21% in FY26 compared with about 13% to 13.5% in the prior year, as per management commentary. Management also stated that profitability from market hiring declined, with margins falling from 7.31% to 6.04%.

On fuel, the company positions its PESO-licensed captive diesel procurement as a strategic advantage. In the presentation, Tejas Cargo cites about 7% diesel cost saving versus retail in FY26. However, management also stated that the retail discount benefit narrowed materially in H2 FY26 to about 3% to 4%, compared with 10% to 14% in earlier periods. The company emphasized fuel supply continuity as a key benefit, and discussed a PESO license sharing agreement that could raise refueling coverage to about 60% from 30%.

New verticals and long-term contracts: Mining, fly ash, coal, and EVs

A major theme in the earnings call is the push into specialized verticals with entry barriers. Management stated that newer verticals such as fly ash transportation, coal transportation and car carrier divisions can have better margins compared to the base business, and discussed the impact of customer sustainability targets on vehicle deployment.

The mining push was supported by a specific contract disclosure. Management stated that the company received a five-year bauxite mining contract from CMDC, valued at about 35 to 40 crore, without selling rights. It also stated that CMDC is expected to launch additional mining areas and the company intends to participate.

On EVs, the investor presentation shows a small base at FY26 with two electric vehicles in the fleet composition. In the earnings call, management stated it had deployed two EVs with Amazon and mentioned an order from Dalmia Cement for deployment of 10 EVs within a 200 to 250 km range on an eight-year contract structure (six plus two). Management framed EV deployments as customer-driven and linked to longer-term contracts with minimum revenue guarantees to make the economics viable.

Balance sheet and cash flow: Leverage moved up in FY26

The company reported net debt to EBITDA of 1.7x in FY26 compared with 1.1x in FY25. Debt to equity was presented at about 1.1x in FY26. Operating cash flow was 59.2 crore in FY26.

The presentation also lists ROCE at 16.5% in FY26, up from 12.8% in FY25, and fixed asset turnover at 3.0x.

Takeaways from FY26 and what to watch in FY27

FY26 shows a company scaling its core fleet-led FTL model, while also attempting to widen the business mix toward higher-yield logistics categories. The revenue growth, fleet expansion, and trip throughput indicate strong demand and execution.

At the same time, margins came under pressure from market hiring and operating cost inflation. The direction of EBITDA margin will depend on how quickly the company can optimize the owned vs hired fleet mix, secure premium vertical work, and manage cost inflation.

For FY27, management commentary points to growth broadly in line with FY26, with potential upside if fly ash, mining and EV-linked long-term contracts scale faster. The key signposts to track will be the contribution from mining, fly ash and coal, progress in car carrier customer wins, and whether EV deployments move from pilot-level to meaningful fleet and revenue share.