292.65 -0.6 (-0.2%) Buy

Waiting to invest in TCI? Look for alternatives because it delivered lacklustre performance

13 min read

TRANSPORT CORPN OF INDIA delivered lacklustre performance on Friday. It delivered -0.2% to close at 292.65. On a day when the overall market breadth was 71%, it closed higher than 64% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.02%.

[Themes containing TCI]

TCI showed a strong bullish trend over the last 3 months. During this period TCI delivered +15.92% and saw a maximum drawdown of -9.64%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in TCI till volatility reduces and a clear trend emerges.


TCI has been outperforming the NIFTY-50 index in recent time. It showed significant underperformance (compared to the NIFTY-50 index) from 29 Jul, 2016 to 30 Jan, 2017. Over the last 3 years and 1 month, TCI underperformed the NIFTY-50 index on 52% days.

During the last three months TCI was mostly profitable and delivered on average +0.25% per day. It's best return during this period (of +4.77%) was on Wednesday, 24 Oct, 2018. While it's worst loss in the same period (of -3.56%) was on Thursday, 1 Nov, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 13 Nov, 2018 and went on till 19 Nov, 2018. This bullish trend returned +4.33% to investors.

The last 12 months saw TCI's investors making profits in 6 months and incurring losses in 6 months. During the last year, TCI delivered profits in more months than NIFTY-50 index. TCI significantly outperformed NIFTY-50 index in Aug 2018, when it returned +29.37% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. TCI and NIFTY-50 index, both had periods of 2 consecutive profitable months. It is interesting to note that both TCI and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Be quick in cutting your loses but not profits
-- Abhishek Shukla

TCI is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant fall in TCI's volatility from 22 Oct, 2018 to 18 Dec, 2018. While there was a significant fall in the NIFTY-50 index's volatility from 31 Oct, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that TCI has significant positive skewness in it's return distribution. This indicates that investors can expect TCI to recover from drawdowns quickly. Which makes TCI a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

NIFTY-50 index has more chance of extreme outcomes than TCI. Therefore, NIFTY-50 must receive a lower allocation than TCI in your portfolio. TCI usually has shorter drawdown period than the NIFTY-50 index.

Based on your interest in TCI you may find it interesting to know that BATAINDIA and HATSUN are both mid caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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