Transport Corporation of India Ltd (TCI) has announced a significant capital expenditure plan of ₹550-600 crore in FY27, representing a substantial increase from the ₹370 crore spent last year. According to managing director Vineet Agarwal, nearly half of this investment will be directed toward ship acquisitions, with ₹200-250 crore specifically allocated for final payments on two new container vessels from China. The ships are scheduled for delivery in the third and fourth quarters of the current fiscal year. As per multiple reports, 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 expansion will significantly enhance TCI's shipping capacity, with the company currently operating six ships with a combined carrying capacity of about 78,000 tonnes. Two new container vessels of 7,500 deadweight tonnes each are expected to add another 15,000 tonnes of capacity this fiscal. Agarwal indicated the company plans to continue adding similar capacity of 15,000-16,000 tonnes over the next three to four years, focusing on increasing carrying capacity rather than merely increasing the number of ships. The company is also evaluating additional vessel purchases for the next financial year and exploring opportunities to acquire second-hand ships to further strengthen its fleet, though suitable assets at the right valuations have not been found yet.
The coastal shipping expansion targets TCI's high-potential seaways division, which contributed around 11% of TCI's consolidated revenue of ₹4,965 crore in FY26. According to the company's latest annual report, this segment accounts for a significantly higher share of operating profit due to superior margins. As reported by Agarwal, shipping represents a high-margin operation, with the new vessels expected to strengthen profitability once operations stabilize after delivery. The expansion comes as TCI doubles down on coastal shipping (domestic sea transport), which the company sees as a high-potential and high-margin segment within its broader logistics portfolio.
TCI's stock closed 0.5% higher at ₹904.75 on the BSE on Wednesday, reflecting positive market sentiment toward the expansion plans. The company had earlier faced delays when a vessel order from a Japanese shipyard was cancelled, leading to the shift to a Chinese shipyard with current delivery expectations. According to Agarwal, the company is also evaluating the purchase of larger second-hand ships in the 20,000-25,000 tonne category, though suitable assets at the right valuations have not been found yet. Markets were shut on Thursday for a public holiday, with the company maintaining its cautious revenue growth guidance of 10-12% for FY27.
The shipping expansion aligns with TCI's broader strategy to reduce India's logistics costs, which currently see road transport accounting for 60-65% of logistics movement while coastal shipping represents only 6%. According to Agarwal, multimodal transport solutions can substantially reduce costs and improve efficiency, with India's logistics costs able to be reduced substantially if more cargo shifts away from roads towards railways and coastal shipping. TCI reported 9.5% revenue growth in FY26 and has maintained cautious revenue growth guidance of 10-12% for FY27, citing muted overall conditions despite early signs of recovery in certain sectors. The company is also exploring alternative fuels such as CNG, LNG and electric vehicles for its trucking business, while planning additional investments of ₹125 crore this year on trucks and railway rakes.
