NEW DELHI: Transport Corporation of India Ltd (TCI) is stepping up investments in its coastal shipping business with plans to induct new vessels and add capacity over the next few years, betting on rising demand for multimodal logistics and lower-cost freight movement.
The Gurugram-based logistics and supply chain management company has planned a capital expenditure (capex) of ₹550-600 crore in FY27, sharply higher than the ₹370 crore spent last year, with nearly half earmarked for ship acquisitions, managing director Vineet Agarwal said in an interview.
“We will be spending about ₹200-250 crore that will go towards making final payment for acquiring the two new ships coming from China. will be delivered this year in the third and fourth quarters,” Agarwal said.
The company is also evaluating additional vessel purchases for the next financial year and is exploring opportunities to acquire second-hand ships to further strengthen its fleet.
TCI currently operates six ships with a carrying capacity of about 78,000 tonnes. Two new container vessels of 7,500 deadweight tonnes (DWT) each are expected to add another 15,000 tonnes of capacity this fiscal. The proposed purchase of second-hand ships would have a larger capacity of 20,000-25,000 tonnes.
Agarwal said the company intends to continue adding similar capacity (about 15,000-16,000 tonnes) over the next three to four years even as some older ships begin nearing retirement.
“We are planning orders so that we can continue augmenting capacity. We are more focused on increasing carrying capacity than merely increasing the number of ships,” he said.
Focus on coastal shipping growth
The expansion comes as TCI doubles down on (domestic sea transport), which the company sees as a high-potential and high-margin segment within its broader logistics portfolio. According to the company’s latest annual report, the seaways division contributed around 11% of TCI’s consolidated revenue of ₹4,965 crore in FY26, while accounting for a significantly higher share of operating profit because of superior margins.
“Shipping is a high-margin operation for sure,” Agarwal said, adding that the new vessels would strengthen profitability once operations stabilize after delivery.
Stcok of TCI closed 0.5% higher at ₹904.75 on the BSE on Wednesday. Markets were shut on Thursday for a public holiday.
The company had earlier ordered vessels from a Japanese shipyard, but the deal was cancelled, leading to delays. TCI subsequently shifted the order to a Chinese shipyard, with deliveries now expected in the third quarter of the current fiscal year.
Apart from new vessels, TCI is evaluating the purchase of larger second-hand ships in the 20,000-25,000 tonne category. However, Agarwal said the company has so far not found suitable assets at the right valuations.
“We have not been able to find the right quality and the right pricing. But it remains under exploration,” he said.
The renewed push into shipping comes at a time when logistics companies are increasingly looking at multimodal transport solutions to counter rising diesel prices and improve efficiencies. Multimodal transport refers to movement of cargo using more than one mode of transport such as sea, rail, road, and air.
Agarwal said India’s logistics costs can be reduced substantially if more cargo shifts away from roads towards railways and coastal shipping.
“Today, road transport accounts for nearly 60-65% of logistics movement, rail comes next and coastal shipping is still only around 6%. If we have to reduce logistics costs as a country, we need to move towards multimodal logistics,” he said.
According to Agarwal, multimodal transport is not only cheaper but also greener because of lower carbon emissions. TCI is also exploring alternative fuels such as CNG, LNG and for its trucking business.
The company plans to spend another ₹125 crore this year on trucks and railway rakes, while about ₹100 crore will go towards warehousing equipment and another ₹100 crore towards land, buildings and warehouses.
TCI reported a 9.5% revenue growth in FY26, slightly below its earlier guidance of 10-12%, amid disruptions caused by geopolitical tensions in West Asia, fuel price increases and temporary production cuts across sectors dependent on LPG and CNG.
Agarwal said higher bunker fuel costs in shipping and rising diesel prices in trucking are likely to create inflationary pressures this year, although these increases are largely passed on to customers through contractual fuel adjustment mechanisms.
For FY27, the company has maintained a cautious revenue growth guidance of 10-12%.
“We are seeing replenishment happening now after inventory correction that built up in the three-month period between March and May. Demand is there in certain sectors, but overall conditions remain slightly muted,” Agarwal said.
He added that while there are early signs of softness in some consumer durable segments, India’s broader economic growth story remains intact.
“We have to remain optimistic in India. A $4 trillion economy growing at 6% is still massive. The base itself is large enough for everybody to grow,” he said.