Logistics stock falls 7% after selling 81% stake in its subsidiary

Synopsis:
Total Transport Systems plunged sharply after it decided to divest 81% of a crucial subsidiary. This unit was responsible for 16% of the company’s revenue. 

The shares of this leading logistics stock are in focus after the company sold a stake in one of its key subsidiaries that significantly contributed to its business. In this article, we will dive deeper into the highlights of this transaction and how it can impact its business.

With a market capitalisation of Rs 133 crore, the shares of Total Transport Systems Ltd reached a day’s low of Rs 80.40 per share, down 7 percent from its previous day’s closing price of Rs 86.05 per share. Over the past five years, the stock has delivered a return of 24 percent, underperforming NIFTY 50’s return of 97 percent.

About the Sale

Total Transport Systems Ltd has entered into a binding term sheet for divesting (selling) up to 81 percent stake in its subsidiary, OneWorld Logistics. The company has sought shareholder approval for the transaction. OneWorld Logistics is a material subsidiary contributing 16 percent of the revenue stream for the previous fiscal year.

The purchaser is Moreshwar Corporation and is a logistics and trading company that is unrelated to the promoters of Total Transport Systems. The company will receive consideration of Rs 75 crores, which will be structured over time. The completion date for the entire transaction is expected by May 30, 2026.

Divesting such a substantial stake could have implications for future operations by potentially decreasing scale and direct service offerings. As the company generated 16 percent, which is around Rs 104 crore out of its total FY25 revenue of Rs 665 crore, it can experience a drop in the company’s total sales. However, it may also provide liquidity that can be utilised to bolster other segments or pay down debt. Effective deployment of these proceeds will be crucial in determining the trajectory of future growth for the business.

Financial and Other Highlights

Total Transport reported a revenue from operations of Rs 163 crore in Q2 FY26, a decline of 13 percent as compared to Rs 188 crore in Q2 FY25. However, on a quarter-on-quarter basis, it grew by 11 percent from Rs 147 crore.

Regarding its profitability, it reported a net profit of Rs 2.36 crore in Q2 FY26, a significant turnaround as compared to a loss of Rs 22 lakh in Q2 FY25. However, on a quarter-on-quarter basis, it declined by 19 percent from Rs 2.94 crore. 

Coming to its segmental highlights, in​‍​‌‍​‍‌​‍​‌‍​‍‌ Q2 FY26, the revenue of Multimodal Transport Operations was Rs 135 crore, which is lower than Rs 162 crore in the corresponding period of the previous year by 17 percent. The Last Mile Delivery Operations segment increased marginally to Rs 27 crore from Rs 26 crore, resulting in 6 percent growth. 

On the other hand, the CHA Activity segment has risen significantly to Rs 2 crore from Rs 1 crore, reflecting a 48 percent increase. The growth of the delivery and CHA services was certainly offset by the decline of the transport sector, which remained the core ​‍​‌‍​‍‌​‍​‌‍​‍‌segment.

Total​‍​‌‍​‍‌​‍​‌‍​‍‌ Transport is a top logistics company that provides tech-driven solutions that make the movement of goods globally easier. As logistics are the lifeblood of trade, the firm offers dependable end-to-end transport services that give businesses the freedom to move cargo efficiently across different sectors.

Totally backed with a solid team and a wide global network, Total Transport has been able to expand to be a leading name in LCL services since 1994. At present, the company, managing more than 80 lakh shipments, is serving 1,100+ destinations and has around 500 professionals who are providing a complete solution to industries such as pharma, auto, chemicals, and ​‍​‌‍​‍‌​‍​‌‍​‍‌infrastructure.

Written by Satyajeet Mukherjee

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