Why doesn’t the cash flow statement of this company have (direct taxes paid)? Is the company paying corporate taxes?
Results are out
Looking for analysis and financial understanding
TARACHAND_23012025192222_NSEIntimationFinancialHighlightsQ3.pdf (414.4 KB)
TARACHAND_23012025172527_NSEIntimationOutcomeofBoardMeetingSigned.pdf (1.8 MB)
Why hasn’t tara chand infra logistics shared their balance sheet in q2fy25 results?
I am waiting on this query from IR team.
Any update yet? Have queried as well.
Promotor buying
To view this in StockEdge, click StockEdge - Analyse Stocks in Indian Markets NSE and BSE
Does the recent stock drubbing have anything to do with this 9 crore land acquisition by the company?
https://nsearchives.nseindia.com/corporate/TARACHAND_01042025134547_TCIL_SE_Intimation_sd.pdf
Tarachand has entered ESM-2, that is creating selling pressure, nothing to do with this.
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Eventually got it today from the new CS. I believe the lack of communication could be due to change in CS.
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Bumper results. Capex cycle is paying off it seems with big jump in revenue. Depreciation has also shot up this year.
What is keeping the stock price muted over last one year.
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Decent numbers but market is finallyu rewarding this stock.
Q1 results
Revenue 61.07 cr vs 45.66 cr up by 33.76% YoY & down by -25.18% QoQ
PAT 6.45 cr vs 4.54 cr up by 42.27% YoY & down by -17.86% QoQ
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Qoq comparison is not right
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Supreme Court Rules in Favor although price went down today
Supreme Court ruled in Tara Chand InfraLogistics Solutions’ favor, exempting vehicles used solely on private premises from motor vehicle tax. This invalidates past tax demands for its vehicles at RINL’s Central Dispatch Yard. It is now entitled to INR 1.06 Crores in tax refunds and reduction of pending demands. It expects this ruling to apply pan-India, pursuing similar relief for other contracts. This landmark Supreme Court ruling for Tara Chand InfraLogistics establishes a crucial precedent for the Indian logistics sector, potentially benefiting all companies operating vehicles exclusively within private premises by reducing their motor vehicle tax burden nationwide.
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Hi Everyone,
Sharing my views below on the company. This is my first post on the platform and views / inputs from the fellow members will be of great help.
Company Introduction
The company is operating mainly in three business areas:
- Equipment Rental: Cranes and other construction equipment on rental basis to larger business groups and EPC companies
- Specialized Projects: Relatively new segment for the company to leverage their experience on niche work within large EPC projects, targeting only 18%+ EBITDA margin
- Steel Logistics & Warehousing: Managing SAIL and RINL depots for warehousing, loading & unloading of steel. Revenue on the basis of per ton of steel handled.
Industry Structure & Developments
- OEM market
- It is important to understand the OEM side developments in the market which has subsequently led to significant changes in the rental industry
- About 5-10 years back, there were two make of construction equipment present in the market: European brands like Liebherr, Kobelco which were perceived to be higher in price but also in terms of reliability and quality. Chinese make machines were lower in quality and price
- Things changed since then and there was a significant improvement by Chinese machines (Sany, Zoomlion) in terms of technology and quality and it started getting acceptance in the market. The machines are half the price of European machines and also has better efficiency and compatibility
- Chinese companies are able to deliver the machines in 1 month lead time versus minimum 6 months for the European machines
- Given the support from Chinese government on exports, these companies currently provide a credit period of 2 years (25-30% upfront payment, rest to be fully paid after 2 years). This changed the dynamics completely in favour of Chinese companies and almost every new machine sold in the Indian market is a Chinese machine now
- Just to highlight, Sany had revenue of USD 10.4 bn and Zoomlion had revenues of USD 6.4 bn in 2024. So, these are large established set-ups.
- Equipment Rental Industry & Competition
- The Indian equipment rental industry has been very fragmented with a number of small size regional players across the country
- These players have been largely catering to subcontracting within infrastructure segment
- Sanghvi Movers has been the largest player in this space, however, has been focused on wind power as a segment. There are other private players also with a decent fleet size but are more regional and infra focused companies
- Over the years, the requirement of certain size and type of equipment including cranes has increased in India across segments as the complexity and scale increased. For example, man lifting platforms – Earlier most of the maintenance work used to happen using a scaffolding which is replaced by man lifting platform for better safety and efficiency
- Some of the large corporate groups (Jindal, Tata, Reliance, Adani) have started consolidating their vendors across projects and geographies which is helping organized players like Tara Chand to gain market share
- Coming back to the point above on OEM side developments, most of the legacy players including Sanghvi have majority of the fleet as European machines acquired over the years. Tara Chand started their journey when the transition was happening and almost the entire fleet is new age Chinese machines with average fleet age of 6-7 years
- These newer machines don’t just have an advantage of better pricing but are more compact for working typically inside the plant areas where space constraint might be there also having better fuel and work efficiency
- Most of the private players hence prefer a relatively newer fleet and it will get a priority for the project and sometimes better pricing as well
- Existing larger players are also moving to new Chinese machines however given the existing fleet mix, transition period, trained manpower, experience of operating and maintaining these machines would mean a lead time of a few years to catch-up
Segment-wise Opportunity Size & Outlook
- Equipment Rental: (FY 2025 Revenue 105 Cr, EBITDA 57 Cr)
- Tara Chand’s Gross block for this segment is ~400 Cr which is still 1/5th of Sanghvi’s gross block (~2100 Cr) built over the number of years. Also, Sanghvi doesn’t have large market share in any other sector than wind. Hence, it will be fair to assume that it will still have a reasonably large untapped market
- The company has done 145 Cr capex in FY 2025 and guided for 100 Cr capex in FY 2026
- The management during the interaction seems confident about the size of the opportunity for them to continue growing over next 2-3 years
- The company has consistently maintained 80%+ utilization for its fleet
- Specialized Projects: (FY 2025 Revenue 32 Cr, EBITDA 7 Cr)
- This is a relatively new segment for the company where it is looking to leverage their experience on niche opportunities within large EPC projects
- Management has acquired a land in Nagpur for this business and further details of the same will be shared by them over the period of time
- Management has guided from 40Cr + turnover from this segment in FY 2026 with ~25% EBITDA margin
- Further details on expansion in this segment can give better understanding on how scalable this opportunity can be. However, based on my understanding, there is no incremental capex required and hence could add to ROCE net of working capital requirements
- Steel Logistics & Warehousing: (FY 2025 Revenue 97 Cr, EBITDA 15 Cr – Had some specific challenges in the first half which is normalized now, Q1 FY 2026 revenue at 30 Cr and 17% EBITDA)
- The company enters into 4-5 years contract with SAIL and RINL to manage steel logistics and warehousing. Warehousing has slightly better margin than logistics
- They have received a new contract from SAIL for an additional warehouse starting Q3 FY 2026. This could add ~18 Cr/ year revenue
- SAIL and RINL in total have about 30-35 stockyards and Tara Chand is managing about 5 as of now. However, not all stockyards will be of meaningful size and scale
- Hence, this will be a relatively stable segment with 10-15% of top line growth and 16-18% EBITDA margins
- They have never failed to renew a contract once they have got it. Hence, the stickiness and longevity of the business might be there
Return Ratios & Working Capital
- The company has ROCE of ~17% and ROE of ~20% for FY 2025. However, the impact of capex done during the year is not reflected fully on profitability
- On the equipment rental side, to put the basic math, on a 100 Rs of Capex assuming it earns 2.5% monthly yield and 60% EBITDA, ROCE of the business is ~18% (It has negative working capital in FY 2025 because of the credit period discussed above, however, I have considered neutral to be conservative)
- The cost of borrowing is ~8% which is rare for this type of business, however, the promoter mentions it is more because of the reputation of the group
- Hence, at 1:1 Debt Equity, the ROE could be more than 25%
- Other two segments have limited capex requirement and hence the requirement will be largely on the working capital side
- It has converted ~83% of the last 3 years EBITDA to operating cash flow (largely because of the credit period benefit on equipment rental segment)
- This would allow the company to grow at 25-30% without equity dilution and maintaining the debt equity ratio
- On the working capital front, the company has made efforts and receivable days have come down from 139 days in FY 2023 to 88 days as on March, 2025
Promoters & Disclosure Standards
- The promoter has been very transparent and upfront over the calls or meetings. He mentions that the company want to be growth oriented yet measured in their capex to ensure sustainability of the business
- The disclosure standards have been quite good. Despite being SME listed earlier, the company used to report quarterly numbers
- They have been regular and informative on quarterly presentations, conference calls and annual reports
- They have been consistent in guidance on revenue and margins and have met it so far
Risk Factors
- The demand can be cyclical given the end use segment it caters to. The company has reasonable diversification across segments and buys cranes / equipment which are fully loaded (with all attachments which can cater to different requirements). However, any broad economic slowdown which impacts the capex and infrastructure activity could lead to slower demand. Like most asset ownership businesses, operating deleverage can also be meaningful at lower fleet utilization. However, in such a scenario, the steel warehousing business provides some cushion to the overall negative impact
- A number of companies in the last 1-2 years has done capex citing a strong demand. This could lead to overcapacity in the industry which in turn could lead to aggressive pricing. Equipment rental is somewhat critical for safety and efficiency of the project and hence the track record would have a reasonable weightage however pricing pressure may remain
- Any government policy restricting or discouraging the import of Chinese equipment could lead to a significant change. However, there are no Indian manufacturer of high tonnage cranes and the ecosystem to build technology, track record and after sales service network could take at least a few years if not more
- Any change from Chinese OEMs on the credit / payment terms or pricing could change the economics. Given that there only 2-3 Chinese companies which dominate the market, they can do so. However, as I understand, all the companies are as of now are aggressive on pricing and credit period to capture more market share and India remains a key market for them
- There is another company named Phoenix Infracon Solutions which is run by brother of Mr. Himanshu Agrawal and is in the same business. This business is run independently since 2016 and largely an aggregator model for fleet (helps connect fleet owners and suppliers). Sometimes, it can be advantageous to Tara Chand in the lean season to deploy the machines, however, the line of business remains the same
Valuation
- The company in my estimate is likely to achieve 100-110 Cr EBITDA for FY 2026. Current market cap is ~550 Cr and with net debt of ~100 Cr, it is available at 6-6.5x FY 2026 EBITDA. (Company usually has decent visibility on equipment rental and specialized projects for coming 6-8 months). If Company continues to grow at 25-30%, it can get rerated.
- The depreciation has been high and incremental addition might be at a lower rate given that the capex during the current year has been large cranes and usually have a longer lifespan (this still needs to be confirmed though)
- The PAT in my estimate can be 32-40 Cr for FY 2026 which gives P/E multiple range of 13-17x
(Discl: I have position in this company)
13 Likes
the mgmt in the recent conc has clearly mentioned that “they operates into cyclical biz, hence YoY to be preferred over QoQ”
1 Like