TCIEXP

TCIEXPRESS LEADER IN EXPRESS February 09, 2021 The National Stock Exchange of India Ltd., BSE Ltd. The Listing Department, The Department of Corporate Services, "Exchange Plaza", Phiroz Jeejeebhoy Towers, Bandra Kurla Complex, Bandra (East), Dalai Street, Mumbai-400 051 Mumbai -400 001 Scrip Symbol: TCIEXP Scrip Code: 540212 Dear Sir/Madam, Sub: Intimation under Regulation 30 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 In compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, please find attached Earnings Presentation on Un-Audited Financial Results for Q3 and Nine Months ended December 31, 2020. This Presentation is also available on the Website of the Company-www.tciexpress.in . This is for your information, records and meeting the disclosure requirements as per applicable Regulation of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. Thanking you, ress Limited Priyanka Company Secretary & Compliance Officer Enel: as above. TCI Express Limited CIN: L62200TG2008PLC061781 Corporate Office:TCI House, Plot No. 69, Sector 32, Institutional Area, Gurugram -122001, India Tel.: +91-124-2384090-94 • Email: info@tciexpress.in Registered Office: Flat Nos. 306 & 307,1-8-273,Third Floor, Ashoka Bhoopal Chambers, S. P. Road, Secunderabad - 500003 -Tel.: +91 40 27840104 Website: www.tciexpress.in Q3 FY2021 Highlights Sequential recovery in Revenue and strong EBITDA and PAT margins, as businesses continue to normalize Board of Directors announced interim dividend of Rs. 2 per share, payout of 100% on face value and 13.2% on 9MFY21 EPS Key Highlights: Rs. 264 Cr Rs. 47 Cr ▪ Q3 FY21 was a mixed quarter which saw pick-up in demand due to festive season but after recovery in October, core industries deteriorated in November 23.3% q-o-q Margin 17.8% ▪ Index for Industrial Production for few key customer Q3 FY21 Income Q3 FY21 EBITDA industries, such as pharmaceuticals declined by 0.8% YoY, textiles by 9.8% YoY, machinery and equipment by 5.4% YoY in November ▪ Company reported strong improvement in EBITDA margins of 17.8% compared to 13.1% and Net Profit margins of Rs. 34 Cr 12.7% compared to 9.5%, last quarter (0.14)x Margin 12.7% ▪ Improved profitability due to cost rationalization measures implemented, is expected to continue going forward Net Debt/ Equity Ratio Q3 FY21 PAT ▪ Company maintains strong capital structure with robust collections from customer 2 www.tciexpress.in 9M FY2021 Highlights Improved EBITDA and PAT margins, due to cost rationalization measures taken by the company Rs. 564 Cr 27.9% (28.9)% y-o-y 9M FY21 Income 9M FY21 ROCE Rs. 85 Cr 21.0% (13.6)% y-o-y Margin 14.9% 9M FY21 EBITDA 9M FY21 ROE Rs. 58 Cr 101.3% (17.2)% y-o-y Margin 10.2% 9M FY21 PAT Cash Conversion Ratio Notes: 1. 9M FY21 RoEand RoCEannualized and impacted due to subdued Q1FY21 amidst health pandemic Covid-19 3 www.tciexpress.in Management Commentary Commentingon theresults,Mr. ChanderAgarwal,ManagingDirector,said: “Third quarter of the fiscal year was a mixed quarter, the period saw sequential growth momentum as the economy normalized, businesses started reaching near-normal levels and demand picked up during the festive season. The quarter started in October with good pick-up in demand but subsequently core industries saw contraction in production in November. Few of our key customer industries were impacted as Index for Industrial Production declined, such as pharmaceuticals decreased by 0.8% YoY, textiles by 9.8% YoY, machinery and equipment by 5.4% YoY in November. Evolving political situation in few parts of country also restricted our topline growth during the quarter. In the current situation, I am pleased to report that in this quarter company delivered Revenue from operations of Rs. 262 crores. EBITDA stood at Rs. 47 crores with margins of 18% and Profit after Tax for the period was Rs. 34 crores with margins of 13%. The company has also announced interim dividend of Rs. 2 per share, with a payout ratio of 13.2% on nine-months EPS. We continue to serve our customers’ needs while ensuring strong operational efficiencies and high-capacity utilization levels in our business. The various cost control measures implemented by the company in the recent past will help us to deliver enhanced profitability in the long run. We appreciate the support of our employees during these turbulent times and beginning from 1st October, salary increments have been accorded to employees. Company is making progress on our strategic, long-term initiatives for productivity improvements and technology advancements. We have completed construction of warehouse in Pune and will commence operations in Q4FY21, only regulatory permissions are awaited at present, which were delayed to Covid-19 impact on regulators functioning. We are also regularly investing in automation and digitizing various processes such as docket and customer communication to ensure shorter turnaround time. We also opened 10 new branches in the quarter. At TCI Express, a strong governance structure, creating an inclusive workplace culture and implementing environment friendly solutions are core pillars of business sustainability. Recently, we have launched a TCI Express ESG Profile on our website to transparently disclose ESG related information and how we are poised to achieve sustainable growth in the coming years. We will be updating this ESG Profile on a regular basis and look forward to keeping all our stakeholders fully informed at all times. Despite the challenges of health pandemic, our investment in digital technology and prudent cost control measures has helped us navigate through this difficult time and we enter the new year with optimism. The increased allocation of spent on infrastructure development and various new initiatives promote manufacturing sector isexpected to have positive impact on logistics sector. We are committed to provide exceptional service quality to our customers, invest to drive operational efficiency and will focus on our core strengths of delivering time definite solutions. 4 www.tciexpress.in Fastest Express Delivery Company in India Year of Commencement 1997 TCI XPS was established in 1996 as one of the foremost divisions of Transport Corporation of India Locations Serviced 40,000 Specialized in offering time definite solutions with focus on Tier II and III cities CountriesServiced 202 ERP enabled operations, Barcoding on packaging, GPS ContainerizedVehicles 5,000 enabled vehicles and CCTV surveillance All India Air Gateways 24 Serves 95% of B2B customers & 5% of B2C Customers CompanyBranch Setup 800 + The only express cargo company in India with own set up across nation. Offers Sunday, Holiday and late Workforce 3000 + pickup services Ranked 402 in Top 500 Companies based on Market Sorting Centres 28 Cap, as on March 31, 2020 5 www.tciexpress.in Why TCI Express? Ranked 402 in Top 500 Companies based on Market Cap, as on March 31, 2020 Asset Light High Value Cargo No Franchise: Lowest Cost Business Model (Low volume, high All owned Structure Branches margins) Containerized Superior API based back- Movement Customer Support end technology Services 6 www.tciexpress.in Geographical Footprint Fastest Delivery Company in India Surface Express Company Branches 800+ Priority Domestic Air Express Express 500+ Express Services International E Commerce Air Express Reverse Express 7 www.tciexpress.in Strategy and Outlook Revenue Growth Impacted due to overall economic slowdown however it is minimized with: ❑ Highly diversified client base and well spread across industry verticals ❑ Continuous expansion in Metro and Tier I Cities through new branch offices Capital Expenditure Planned CapEx of Rs. 400 crores in 5 years ❑ Investment in sorting centres ❑ Automation and enhancing technological capabilities ❑ Out of which Rs. 160 crores have been spent in last 3.75 years TCI Express Offering ❑ Expand value added services ❑ Continuous focus on volume growth through B2B client acquisition ❑ Expand air international business 8 www.tciexpress.in Financial Performance Q3 Y-o-Y Q2 Q-o-Q Nine Months Y-o-Y Particulars (in Cr) FY2021 FY2020 Growth (%) FY2021 Growth (%) FY2021 FY2020 Growth (%) Income from Operations 262.5 268.4 (2.2)% 212.9 23.3% 564.2 794.0 (28.9)% Other Income 1.7 0.9 1.5 4.6 3.2 Total Income 264.2 269.2 (1.9)% 214.4 23.2% 568.8 797.2 (28.7)% EBITDA 47.0 35.2 33.6% 34.0 38.2% 84.5 97.8 (13.6)% Margin (%) 17.8% 13.1% 15.9% 14.9% 12.3% EBIT 44.8 33.0 35.7% 31.9 40.8% 78.1 92.1 (15.2)% Margin (%) 17.0% 12.3% 14.9% 13.7% 11.6% PBT 44.7 33 35.8% 31.5 41.6% 77.5 91.5 (15.3)% Margin (%) 16.9% 12.2% 14.7% 13.6% 11.5% PAT 33.6 25.5 31.6% 23.5 43.1% 58.0 70.1 (17.2)% Margin (%) 12.7% 9.5% 11.0% 10.2% 8.8% EPS 8.59 6.64 29.3% 6.11 40.5% 15.13 18.27 (17.2)% Notes: 1. EBITDA and EBIT includes other income 2. All Margins calculated on Total Income 9 www.tciexpress.in * All numbers in Crores unless specified Q3 FY2021 Performance Discussion • Total Income increased to Rs. 264 Crores vs Rs. 214 Crores in Q2 FY21 reflecting Q-o-Q recovery in businesses as economy moves forward towards normalization • Improved EBITDA margins, were achieved due to: o Effective cost control measures – lower operating expenses, employee benefit expenses and other expenses • Capex of Rs. 41 Cr incurred during 9MFY2021 on expansion of sorting centres and IT infrastructure • Pune sorting centre construction is complete and is expected to be operational in Q4FY21. Delay in receiving regulatory permissions due to Covid-19 • 20 new branches were opened during 9MFY2021 in the metro cities to deepen TCI Express presence, as a part of our core strategy 10 www.tciexpress.in * All numbers in Crores unless specified Cash Flow from Operations vs Free Cash Flows (9M FY2021) Continue to Generate Strong Cash Flows 85.7 81.1 77.5 73.9 52.3 53.2 49.2 44.4 14.4 11.2 FY2017 FY2018 FY2019 FY2020 9M FY21 Cash Flow from Operations Free Cash Flows • Track record of consistent generation of cash flows with a focus on enhancing free cash flows • High EBITDA to cash flow conversion due to negligible debt and depreciation component • Efficient working capital management, strong cash flow conversion cycle and robust collections from customers 11 www.tciexpress.in * All numbers in Crores unless specified Quarter Performance Trends Total Income EBITDA and Margins 47.0 269.2 264.2 239.1 214.4 35.2 34.0 27.9 17.8% 90.2 3.5 13.1% 15.9% 11.7% 3.9% Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 PBT and Margins PAT and Margins 44.7 32.9 31.5 33.6 25.5 25.5 23.5 19.0 16.9% 1.3 14.7% 0.9 12.7% 12.2% 10.7% 1.4% 9.5% 8.0% 1.0% 11.0% Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 Q3 FY21 Notes: 1. EBITDA includes other income 12 2. All Margins are calculated on Total Income www.tciexpress.in * All numbers in Crores unless specified Annual Performance Trends Total Income from Operations EBITDA and Margins 1,027.0 1,036.3 887.2 122.2 125.7 751.6 92.7 63.3 11.9% 12.1% 10.5% 8.4% FY2017 FY2018 FY2019 FY2020 FY2017 FY2018 FY2019 FY2020 PBT and Margins PAT and Margins 89.1 117.0 111.9 72.8 83.8 58.4 56.5 10.9% 11.3% 37.5 9.4% 7.5% 8.6% 6.6% 7.1% 5.0% FY2017 FY2018 FY2019 FY2020 FY2017 FY2018 FY2019 FY2020 Notes: 1. EBITDA includes other income 13 2. All Margins are calculated on Total Income www.tciexpress.in * All numbers in Crores unless specified Key Ratios Dividend per Share (Rs) & Payout (%) Return on Capital Employed (%) 4.0 42.8% 3.0 38.2% 38.0% 2.5 31.5% 2.0 27.9% 1.6 16.3% 16.4% 15.8% 17.2% 13.2% FY2017 FY2018 FY2019 FY2020 9M FY21 FY2017 FY2018 FY2019 FY2020 9M FY21 Return on Equity (%) Current Ratio (x) 31.8% 30.7% 29.5% 26.1% 2.52x 2.24x 1.86x 1.69x 21.0% 1.35x FY2017 FY2018 FY2019 FY2020 9M FY21 FY2017 FY2018 FY2019 FY2020 9M FY21 Notes: 1. Interim dividend for FY21 is Rs.2 per share 14 www.tciexpress.in 2. 9M FY21 RoEand RoCEannualized and impacted due to subdued Q1FY21 amidst health pandemic Covid-19 Express Industry – An Outlook Logistics as % of GDP 60% 14% India GDP $2.7 TN Road $2,726 Bn Total Logistics Spend $360 Bn 31% Rail Road Transportation $210 Bn Indian 15% Logistics Market $13,608 Bn Split Un-Organised Segment 95% 9% Water 8% TCI Express Carries $10 Bn $20,494 Bn 0.1% TCI Express Market Share 5% Air Notes: 15 1. Source : World Bank Database -2018 Figures, Department of Commerce –Gov. of India www.tciexpress.in Indian Logistics Industry Recent Logistics Sector Transformation Initiatives Infrastructure Development Formalization of Sector Operational Efficiency • Goods and Service Tax – pre filled • Automation of Sorting Centres • Increased allocation by government numbers on Infrastructure development in Union Budget 2021 • GPS Enabled Tracking and • Implementation of E-way Bill Improved Customer Support • Launch of New Dedicated Freight Services Corridor • Invoice Reference Number • Improved Rail and Port Connectivity through e-invoicing • Route optimization using data analytics • Multimodal Logistics Park Key areas for creating a sustainable growth in logistics sector Logistics Infrastructure Regulatory Reforms Technological Integration 16 www.tciexpress.in Management Team Mr. D P Agarwal, Chairman & Director Mr. D P Agarwal is the Chairman and Director of TCI. Mr. Agarwal has been associated with the transport industry for more than 51 years. He hasbeencontributingindevelopingtheunorganizedlogisticssectorintoanorganizedone. Mr. Agarwal is also associated with various Chambers of Commerce including CII, FICCI & PHDCCI. He also takes active participation in many socialandphilanthropicactivitiesforthecommongood. Mr. Chander Agarwal, Managing Director Mr.ChanderAgarwalisaBachelorofScienceinBusinessAdministrationfrom1996to2001fromBryantCollege,Smithfield,RI,HejoinedTCIas SummerInternandworkedinvariousdepartmentsincludingoperations,logisticsandmarketingetc.therebygettingfairamountofexposureto thekeyfunctionsintheCompany. His hands-on experience with Transfreight USA, a 3PL specializing in 'lean logistics' for Toyota Motor vehicles, USA, has given him unmatched knowledge of the Supply Chain Management. Currently he is spearheading Group TCI's international expansion across Asia, Latin America & Africa. Mr. PabitraPanda, Chief Operating Officer Mr. Pabitra Mohan Panda, is a Chief Operating Officer (COO) of the Company effective from August 7, 2019. He is Post Graduate in Computer ApplicationsandStatistics.HehasjoinedTCIGroupintheyear1998andhasadistinguishedservicerecordof21Yearsinthe Company. He worked in various functions and departments and risen to the designation of Regional Express Manager. Prior to such elevation as COO, he wasappointedRegionalManager-DelhiRegiononMay2,2016. 17 www.tciexpress.in Management Team Mr. Mukti Lal, Chief Financial Officer Mr. Mukti Lal is the Chief Financial Officer at TCIEXPRESS. He is a qualified Chartered Accountant and has been associated with Transport Corporation of India Limited (the Demerged Company) in various capacities for last 16 years. He was working as CFO-XPS, Division of Transport CorporationofIndiaLimited.Heisafinanceprofessionalwithoveradecadeofexperiencespanningtheentiregamutoffinanceandhadplayed majorroleinoverallstrategyandcorporategovernance. Mr. Girish Dua, Chief Marketing Officer Mr. Girish Dua is a Management graduate and a Pharmacist, with over 20 years of experience. He has a strong background in Sales and Marketingandhedriveshimselftoachieveandproduceconcreteresults.Heenjoysreading,andtheknowledgeandperspectivecontributedto strengthen his marketing skills. He always thrives on "Out of the Box" thinking for most complex situations. Ethical, Self-motivated, ConscientiousLeaderiswhatdefineshimthebest 18 www.tciexpress.in Visit our ESG Profile on ESG a Core Pillar of Strategy Environment “At TCI Express Limited, we are committed to manage “At TCI Express, we are focused on enhancing operational environmental and social footprint in our operations. We believe efficiencies through automation and digitization. We continue that making the environment an integral part of our business to make investments in renewable energy, manage our operations will create a positive impact on our business considering carbon footprint, and engage with the community to adopt our widespread operations” environment-friendly practices. We constantly strive to optimize energy conservation through engagement in providing Integrated Logistics Services” Environment Strategy in Place “The Company always strives to optimize energy conservation though it is engaged in providing Integrated Logistics Services and it is committed to investing in the latest energy-efficient technologies. The Company has implemented various energy- saving devices and systems, which help in conserving energy” Energy Efficiency Initiatives “In order to minimize plastic waste, we eliminated single-use plastic water bottles from all our offices, leading to the removal of a substantial amount of plastic, which would have ended up in landfills. Besides, in offices, glass jars have replaced and we preferred to use multi-use water bottles in meeting and video conferencing rooms” Reduction in Plastic Use “Although the scope for direct waste is minimal at logistics operations, however we are constantly exploring opportunities to recycle waste. In our office, generally two types of waste generated; 1. Paper waste: We hand over paper waste to an waste recycling agency ""One Step Greener"" for recycling; 2. E-waste: We collect e-waste and send it to Rewari hub which is our centralized e-waste collection/storage site and handed over to the Government” Recycling Waste 19 www.tciexpress.in Visit our ESG Profile on Social Governance “At TCI Express, we believe that to ensure skill development “The Company has formulated all policies applicable to it such and to be able to face major challenges, we need teams who as code of conduct, insider trading, Business Responsibility etc.” deliver and who are motivated. Our human capital is our Corporate Governance Policies greatest tool for shaping the future of the Company and is also “In spirit and deed, TCI Express is committed to conducting its critical for our smooth functioning; TCI Foundation is committed affairs in a fair and transparent manner by adopting the to serve the nation with a motto of equality and better life for highest standards of professionalism by inculcating honesty, all citizens. The company has safe and healthy work integrity, ethical behavior and zero tolerance for bribery and environment” Social Strategy in Place corruption in its business activities” Behaviour and Business “All the policies have been disseminated to the employees Ethics through the internal network of the Company. Further various “All transactions with Related Parties are placed before the policies and communications, oriented to employees are also Audit Committee as also the Board for approval. Prior omnibus being conveyed regularly through the display at the notice approval of the Audit Committee is obtained for the board of the Company” Communication of Labour Policy transactions which are unforeseeable and of repetitive nature” “We provide solutions to our customers and satisfy their needs Related Party Transactions and aspirations. Consistent engagements with our customers “Neither the Statutory Auditors nor the Secretarial Auditor result in getting their feedback which helps us identify the raised any specific opinion, qualification, observation or problems. We connect with them to understand the adverse remarks or disclaimer in their Reports that may call for advantages of our services through multiple touchpoints and any explanation from the Board of Directors” Concerns keeps track of consumer satisfaction, as the same is of prime Identified in Audit Report importance for carrying on any business” Customer Responsibility Initiatives “The Chairman and Managing Director are different personnel. Chairman: Mr. D. P. Agarwal and Managing Director: Mr. “The Company uses warehouses and vehicles of small Chander Agarwal” Chairperson/MD Separation entrepreneurs and MSME sectors who are mostly owners. The Company promotes small entrepreneurs to work as Business “4 out of the 8 board members are independent ” Board Associate/Vendors. The Company provides regular training to Independence these Business Associates /Vendors” Local Employment and Sourcing 20 www.tciexpress.in Awards and Recognitions Logistics Excellence Tech innovator of The Year Best Express Logistics Services Provider of the Year TCI Express is now certified as Great Place to Work At India Logistics Summit & Awards 2019 13th Express , Logistics & Supply chain Leadership Awards BharariyaManvataVikash Puraskar2019 to ASIAN Business Leaders Award to WCRC International Leaders Award to Mr. Chander Agarwal, MD TCI Express Mr. Chander Agarwal, MD TCI Express MrChander Agarwal, MD TCI Express as Power Brands Inspirational Leader of India for Demonstrating Exemplary Leadership Qualities as India’s Inspirational Leader 21 www.tciexpress.in CORPORATE GOVERNANCE Corporate Governance LISTED ENTITY ISO CERTIFIED RATED BY Ranked 402 in Top 500 Companies based on Market Cap, as on March 31, 2020 IATA CERTIFICATE Business Superbrand The Economic Times of 2020 Iconic Brands Of India 22 www.tciexpress.in Key Takeaways ❑ TCI Express revenue has grown at CAGR of 11.2% in last 4 years ❑ Asset light model continues to drive strong cash flows ❑ Consistently paying dividend for last 4 years and generating high return on capital employed ❑ Strong balance sheet and flexible capital structure ❑ Continued focus on technological advancement to reduce turnaround time – Digitalization of dockets and customer communication improving supply chain efficiency ❑ MSME’s continues to drive the growth and TCI Express remains a key beneficiary as Indian economy formalise 23 www.tciexpress.in Contact Information This presentation contains statements that are “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to TCI Express’ future business developments and economic performance. While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. TCI Express undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or circumstances. For further information, please contact: Mukti Lal Ravi Gothwal / Vikas Luhach Chief Financial Officer, TCI Express Churchgate Partners +91 124 238 4090-4094 (Extn. 606) +91 22 6169 5988 mukti.lal@tciexpress.in tciexpress@churchgatepartners.com 24 www.tciexpress.in TCI EXPRESS LIMITED TCI house, 69 Institutional area, Sector -32, Gurgaon 122001, Haryana, India P: +91 124 2384090-94 • E: info@tciexpress.in W: www.tciexpress.in • Toll free: 1800 2000 977 25 www.tciexpress.in