TCI eyes 30-40% jump in coastal shipping capacity over next five years

Transport Corporation of India (TCI) is planning to grow its coastal shipping capacity by 30-40% to around 94,000 tonnes of deadweight tonnage over the next four to five years, according to Managing Director Vineet Agarwal.

The company currently operates almost 78,000 tonnes of DWT across its fleet, and expects to add another 15,000-16,000 tonnes with two new vessels arriving this year. Assuming similar additions annually, accounting for some subtractions as older ships are retired, the net capacity increase should land in the 30-40% range over the coming years.

Though coastal shipping accounts for only about a third of TCI’s overall business, the expansion is designed to strengthen the company’s broader multimodal logistics capabilities. TCI currently owns six coastal container ships and has traditionally bought them second-hand, though it placed an order with Chinese shipyards roughly two years ago for new vessels. Two of those ships are expected to arrive later this financial year, bringing the fleet to around eight vessels by the end of FY27.

The company has been paying advances on those newbuilds over the past few years, with this year’s payments covering the final instalments. TCI has earmarked roughly Rs 200 crore in capex for the shipping business this year, and is also scouting for additional second-hand tonnage, as well as potentially a brand-new vessel, which could require further capital outlay beyond current plans.

Agarwal cautioned against fixating on ship count alone, pointing instead to overall capacity as the real metric, since some vessels in the fleet will be scrapped over the next two to three years due to age. Shipping, he noted, remains a relatively small piece of TCI’s business from a revenue and capital-employed standpoint and isn’t expected to become the company’s dominant segment.

TCI’s own truck fleet stood at roughly 1,200-1,300 vehicles as of June 2026, though the company typically has around 10,000 trucks in operation at any time when factoring in vendor fleets and spot-hire capacity. It also runs three AFTO trains handling over 2,800 rakes, and manages 67 yards along with 17 million square feet of warehousing space.

Overall, TCI is budgeting Rs 400-500 crore in annual capex through FY30 to expand its fleet and multimodal network, up from about Rs 370 crore in FY26. Of that, trucks are expected to draw around Rs 100 crore a year, railway rakes and automotive carriers roughly Rs 30-40 crore, land and buildings another Rs 100 crore, and warehouse equipment a further Rs 100 crore.

The company’s consolidated revenue for Q1 FY27 came in at Rs 1,248 crore, up 9.58% year-on-year, aided by higher diesel prices and cargo volumes. Net profit for the quarter fell 75 basis points year-on-year to Rs 105 crore. Agarwal attributed the softer profitability partly to rising bunker costs in the shipping segment amid the West Asia crisis, alongside labour shortages and lower dividend income from certain subsidiaries.

On the West Asia disruption specifically, Agarwal said the impact on TCI has been largely contained. “I don’t think we have really had a hit. It is largely a pass-through. Margins also have not really been impacted,” he said, adding that the indirect effect has shown up mainly through customers cutting back on exports to West Asia, along with slower import volumes or shipments taking longer alternate routes instead of transiting the region.

Looking ahead, Agarwal expects freight demand to pick up in Q2 FY27 as companies rebuild inventories following recent GST cuts and prepare for the festive season. He has guided for 10-12% growth in both topline and bottomline, pointing to India’s underlying economic momentum. “India is a $4 trillion economy now. That means the base itself is quite high. The real growth of over 6 per cent and the nominal growth of around 10-12 per cent means the business will continue to generate a lot of freight volume. Typically, freight grows by about 1.25-1.5 times GDP growth. That means a certain amount of volume will continue to grow in the country,” he said.

He added that while segments like automotive and industrial continue to drive growth for TCI, MSMEs and FMCG players are facing headwinds, MSMEs from tighter credit availability and higher input costs, and FMCG from softer volume growth. TCI’s FY26 revenue stood at Rs 4,916.8 crore, with net profit of Rs 456.3 crore.