Detailed Rationale

Crisil Ratings has reaffirmed its ‘Crisil AA/Stable/Crisil A1+’ ratings on the bank facilities of Transport Corporation of India Limited (TCIL).

 

The rating takes into account the company’s strong business risk profile marked by sustained revenue growth and healthy operating efficiencies. TCIL has a leading market position in the logistics business aided by presence across different segments – Freight, Supply chain and Seaways - strong infrastructure and robust financial risk profile. These strengths are partially offset by sizeable proportion of conventional low-margin freight business in revenue and capital intensive nature of business in supply chain and seaways.

 

The operating revenue has grown by 8.5% to Rs 3,593 crore in the nine months ended December 31, 2025, driven majorly by supply chain segment amid healthy demand in end industries such as automobile, retail, consumer durables, quick commerce and Agri. The freight segment growth remains moderate at ~4% in 9M FY26 driven by demand in consumer facing business despite softness in infra and capital goods sectors. Seaways segment growth has remained flattish (~2% growth) as there was scheduled dry docking of 3 ships in the same period. TCIL’s revenue is expected to continue its growth momentum over the medium term with its focus on improving share of less-than-truckload (LTL) in the freight segment, increasing presence in new-age sectors in the supply chain division and addition of fleet in the seaway segment from Q3 FY27 onwards.

The operating margins stood at ~ 10.4% during the nine months ended December 31, 2025 inline with corresponding period previous fiscal. Operating margins are expected to gradually improve over the medium term, driven by several key factors, including increased contribution of higher margin segments - supply chain and seaways. Additionally, diversification in business supported consistency of profit margin over the years and shieled company’s cashflows from any headwinds faced by a particular segment and counterbalance moderation, resulting in stable margins and healthy growth over the years. Further, the performance remained healthy in Transystem Logistics International Private Limited (TLI), a 49% JV of TCIL with revenue growth of ~12% to Rs 964 crores and healthy operating margins of ~17.1% in first 9 months of fiscal 2026. TCIL has been regularly receiving dividend income from the JV’s profit and has received Rs 74 crores in fiscal 2025. Over the near to medium term, impact of increase in crude prices due to West Asia crisis on the company’s operating performance remains a monitorable.

 

The financial risk profile continues to remains strong marked by estimated healthy networth of over Rs 2500 crore and gearing ~ 0.1 time as on March 31, 2026. Debt protection metrics like interest coverage and net cash accruals to total debt is expected to remain at over 25 times and 1.5 times respectively in fiscal 2026 and is expected to remain healthy over the medium term. This is despite company’s significant capex pipeline of over Rs 1200 crores in next 3 years which is expected to be funded majorly through internal accruals with limited dependance on external debt. The company has healthy liquidity reflected by cash equivalents of Rs 255 crores as of December, 2026. Further supported by working capital limits of ~Rs 200 crores (negligible utilisation of less than 1% in last 12 months till February, 2026).

Analytical Approach

Crisil Ratings has combined the business and financial risk profiles of TCIL and its subsidiaries and joint ventures (JVs; to the extent of TCIL’s interest) because of business and financial links.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers - Strengths

• Leading market position: TCIL is an established integrated logistics service provider in India. It handles ~2% of GDP by value and services well-diversified customer base spread across sectors. It is the only player in the domestic logistics industry to offer multi-modal services through road, rail and sea.

 

Apart from the freight business, TCIL has a healthy presence in supply chain solutions and seaways segment. In the supply chain segment, the company provides unique customised and full stack solutions that reduce the supply chain issues of clients. It caters to large players in the auto, consumer durables and retail sectors, among others. The company also has a strong focus in providing supply chain services to speciality chemical players and have recently established TCI Chemlog Private Limited (TCPL) to cater the specific needs of these players. In the seaways segment, the company enjoys a monopolistic position with one of the few companies available from Chennai to Andaman and Nicobar Island.

 

• Strong infrastructure with presence across freight, supply chain and seaways segment: TCIL operates a fleet of around 10,000 trucks, 3 automobile freight train operator (AFTO) trains and six coastal cargo ships, 8,500 general purpose containers, 750+ ISO liquid tank containers, 22,000+ cold pallet positions and warehousing space of 16+ million square feet. The hub-and-spoke marketing network, comprising over 25 hubs and 900 branches, enables TCIL to handle freight across 18,000 domestic and overseas locations. The advanced vehicle-tracking system and network provided to all branches, unique control tower and customer relationship management (CRM) systems give customers accurate and timely information and help cover any urgent requirements. The strong infrastructure should continue to support business growth over the medium term. Over the years the company has diversified into different segments of logistics which have helped in consistent growth, even across the business cycles with difficult scenarios like, COVID, US tariff. Company’s cashflow is shielded from any headwinds faced by a particular segment and counterbalance moderation, resulting in stable margins and healthy growth over the years.

 

• Strong financial risk profile: The financial risk profile continues to remain strong with Networth expected over Rs 2,500 crore and gearing around 0.1 time as on March 31, 2026. Debt protection metrics like interest coverage and net cash accruals to total debt is expected to remain at over 25 times and 1.5 times respectively in fiscal 2026 and is expected to remain healthy over the medium term. The company has huge planned capex of over Rs 1200 crores in next 3 years towards strengthening infrastructure (fleet addition, warehouses, purchasing ships, expansion of branches) and will be majorly funded by cash accruals. The company has healthy liquidity reflected by cash equivalents of Rs 255 crores as of December, 2026. Further supported by working capital limits of ~Rs 200 crores (negligible utilisation of less than 1% in last 12 months till February, 2026).

Key Rating Drivers - Weaknesses

• Susceptibility to intense competition in the road freight transport industry which also remains vulnerable  to economic downturns: TCIL's traditional road transportation business contributed 44-45% to the consolidated revenue during the nine months ended December 31, 2025. The FTL segment of road freight transport segment remains vulnerable to intense competition from both unorganised players and new-age start-ups, as this segment is highly fragmented and has low entry barriers. TCIL has been focusing on increasing its share of LTL services which is expected to help the company navigate such challenges.

 

Notably, the freight segment operates on low single-digit margins, primarily due to the asset-light business model, however this segment has a healthy return on capital employed (RoCE).

 

Profit before interest and tax (PBIT) margin stood at ~2.2% during the first nine months of fiscal 2026, which has declined from ~4% in fiscal 2023. In addition, implementation of the goods and services tax has increased the entry barrier and helped organised players gain larger market share. Profitability will remain a key rating sensitivity factor over the medium term.

 

• Significant capex pipeline: Company has significant capex outlay in the medium term, as segments like supply chain and seaways involves continuous capacity addition, upgradation and maintenance, any delay in cost overruns or slower than expected ramp up in the new capacities could impact the company’s financial, making timely project execution and cost management a key monitorable.

Liquidity Strong

Liquidity is supported by expected net cash accrual of over Rs 500-700 crore annually, which will be sufficient to fund major capex requirements, incremental working capital requirement and debt obligation over the medium term. TCIL had cash and cash equivalent of around Rs 255 crore as on Dec 31, 2025. Furthermore, bank limits (~Rs 200 crores) remained unutilised for the 12 months through Feb 2026.

Outlook Stable

TCIL’s business risk profile will remain strong over the medium term, supported by healthy revenue growth, sustained profitability in the supply chain and coastal shipping divisions, and improving efficiency in the freight segment.

Rating sensitivity factors

Upward factors:

• Sustained improvement in scale of operations and operating margin at ~12%
• Sustenance of healthy financial risk profile

 

Downward factors:

• Stretch in receivables to more than 90 days of sales, leading to higher dependence on borrowings
• Weakening of the financial risk profile due to decline in profitability or substantial debt-funded capex

About the Company

TCIL was established in 1958 by Mr P D Agarwal. From a conventional transportation company, TCIL has emerged as India’s largest integrated logistics service provider. It has a network of over 1,000 company-owned offices and more than 3,700 employees. TCIL offers a diverse range of services which are highlighted below:

 

TCI Freight provides total transport solutions for cargo of any dimension or product segment, including FTL, LTL, small packages and consignments, and odd dimensional cargo.

 

TCI Supply Chain Solutions is a single window enabler of integrated supply chain solutions right from conceptualizing and designing the logistics network to actual implementation. The core service offerings are supply chain consultancy, inbound logistics, warehousing and distribution centre management, and outbound logistics. TCI Chemical Logistics Solutions is a subdivision which provides storage of chemicals – liquid, dry and gases – in compliant warehouses and movement in ISO tank containers, gas tankers and flexi tanks by rail, road and coastal.

 

TCI Seaways is equipped with six ships in its fleet and caters to the coastal cargo requirements for transporting containers and bulk cargo.

 

It has formed two JVs: TLI with Mitsui and Co Ltd (Mitsui), which offers high quality integrated logistics solutions to Japanese automotive manufacturers and suppliers in India, and TCI-CONCOR Multimodal Solutions Pvt Ltd with Container Corporation of India Ltd, an end-to-end multimodal logistics solutions provider. TCIL demerged its express cargo division into a separate entity, TCI Express Ltd (rated ‘Crisil AA-/Stable’), with effect from April 1, 2016. TCIL through its subsidiary TCI Cold Chain Solutions Ltd, an integrated cold chain service provider for temperature-controlled warehousing and distribution services, has entered another joint venture with Mitsui in fiscal 2022. Mitsui enjoys global expertise in logistics and supply chain management. It is believed that the synergies created by bringing together the respective resources and capabilities of the two companies will help create more value for customers.

Any other information: Not applicable

Annexure – List of entities consolidated

Name of entities	Extent of consolidation	Rationale for consolidation
TCI-CONCOR Multimodal Solutions Pvt Ltd	Full	Subsidiary with 51.0% shareholding
TCI Cold Chain Solutions Ltd	Full	Subsidiary with 80.0% shareholding
TCI Chemlog Private Ltd*	Full	Subsidiary with 100.0% shareholding
TCI Holdings Asia Pacific Pte Ltd	Full	Subsidiary with 100.0% shareholding
TCI Bangladesh Ltd	Full	Subsidiary with 100.0% shareholding
TCI Nepal Pvt Ltd	Full	Subsidiary with 100.0% shareholding
TCI Global Pte Ltd	Full	Step-down subsidiary with 100.0% shareholding
TCI Middle East Logistics Services L.L.C.**	Full	Step-down subsidiary with 100.0% shareholding
Transystem Logistics International Pvt Ltd	Equity method	JV/associate with 49.0% shareholding
Cargo Exchange India Pvt Ltd	Equity method	JV/associate with 32.5% shareholding

* Incorporated on September 4, 2024

** incorporated on October 3, 2023