TVSSCS - TVS Supply

📊 NSE: TVSSCS 🏢 Miscellaneous 📅 Last Updated: 12/14/2025 14:36

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 6% YoY to INR 2,662.6 Cr in Q2 FY26. The Integrated Supply Chain Solutions (ISCS) segment grew 8.4% YoY to INR 1,993.0 Cr, while the Global Forwarding Solutions (GFS) segment reported revenue of INR 669.6 Cr, showing a 9.9% sequential growth despite YoY pressure from freight rates.

Geographic Revenue Split

The company operates across four continents: Asia, Europe, North America, and Oceania. In FY25, ISCS revenue was INR 5,496.54 Cr (55% share) and Network Solutions was INR 4,499.18 Cr (45% share). Europe was a significant driver for ISCS growth in Q2 FY26 due to the recovery of the ISCS Europe business and the turnaround of the IFM business.

Profitability Margins

Profit Before Tax (PBT) margin for Q2 FY26 improved to 0.9% from 0.7% YoY. The company has a medium-term target to reach a 4% PBT margin by Q4 FY27. PAT for Q2 FY26 was INR 16.31 Cr, a 54% increase from INR 10.61 Cr in Q2 FY25, driven by operational discipline and cost-out programs.

EBITDA Margin

Consolidated Adjusted EBITDA margin stood at 6.7% (INR 178.4 Cr) in Q2 FY26. ISCS EBITDA margins expanded to 8.7% from 8.2% YoY, a 50 bps improvement. GFS adjusted EBITDA margin declined to 2.2% from 4.2% YoY due to persistent pricing pressure in freight rates.

Capital Expenditure

The Board approved a further investment of up to INR 100 Cr in FIT 3PL Warehousing Private Limited, a wholly-owned subsidiary, to facilitate business expansion. Historical ROCE was 4.7% in FY25 compared to 4.8% in FY24.

Credit Rating & Borrowing

Not disclosed in available documents; however, the company manages working capital through financing and recently had 5,000,000 shares pledged in favor of Catalyst Trusteeship Limited as security for debenture holders on December 8, 2025.

⚙️ Operational Drivers

Raw Materials

Material related costs (representing 16.7% of Q2 FY26 revenue at INR 446.3 Cr), Freight and handling expenses (27.3% of revenue at INR 727.3 Cr), and Employee costs (24.2% of revenue at INR 644.4 Cr).

Import Sources

Sourced globally across Asia, Europe, North America, and Oceania to support 3PL and 4PL bespoke solutions.

Key Suppliers

Not specifically named; however, the company relies on a network of sub-contractors, with sub-contracting expenses totaling INR 369.4 Cr in Q2 FY26.

Capacity Expansion

Expansion is focused on warehousing through FIT 3PL Warehousing (Turnover INR 133.18 Cr as of March 2025) and the 'Project One' initiative in the UK and Europe to drive operational synergies.

Raw Material Costs

Material costs declined sequentially from INR 487.4 Cr in Q1 FY26 to INR 446.3 Cr in Q2 FY26 (an 8.4% decrease) due to changes in the business mix and lower volumes in specific segments.

Manufacturing Efficiency

The company follows an asset-light model; efficiency is measured by the turnaround of the IFM business and the integration of ISCS Europe, which drove margin recovery in H2 FY25.

Logistics & Distribution

Freight, clearing, and forwarding expenses increased to INR 727.3 Cr in Q2 FY26 from INR 680.3 Cr in Q1 FY26, a 6.9% sequential increase aligned with GFS volume growth.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

Growth will be achieved through a mid-teen revenue target driven by an active business pipeline of INR 6,200 Cr, the 'Project One' cost-savings program (INR 100-120 Cr annualized), and expanding 3PL/4PL services in North America and Europe.

Products & Services

Bespoke 3PL (Third-Party Logistics) solutions, 4PL (Fourth-Party Logistics) services, warehousing, freight forwarding, and integrated supply chain solutions.

Brand Portfolio

TVS Supply Chain Solutions (TVS SCS), FIT 3PL Warehousing.

New Products/Services

New business wins contributed 8.1% of Q2 FY25 revenue; focus is on converting the INR 6,200 Cr pipeline into high-quality growth.

Market Expansion

Targeting mid-teen growth across Asia, Europe, North America, and Oceania with a focus on scaling the ISCS segment which outperformed regional GDP growth at a 13% CAGR (FY21-FY25).

Market Share & Ranking

ISCS business has grown at a 13.0% CAGR between FY21 and FY25, outperforming the GDP growth in operating markets.

Strategic Alliances

Strategic partnership with TVS ILP (share of profit included in adjusted PBT calculations).

🌍 External Factors

Industry Trends

The industry is shifting toward tech-led, asset-light 3PL/4PL providers. TVS SCS is positioning itself to capture this by targeting an 8-11% PBT margin to match global industry best-in-class peers.

Competitive Landscape

Competes with global logistics peers; focuses on 'right-shoring' and 'right-sizing' to maintain a competitive cost structure.

Competitive Moat

Moat is built on deep domain expertise, a global network, and proprietary technology. Sustainability is driven by long-term integrated contracts in the ISCS segment (55% of revenue).

Macro Economic Sensitivity

Highly sensitive to global trade volumes and freight rates; GFS margins are currently suppressed by macro headwinds and pricing pressure.

Consumer Behavior

Shift toward outsourced supply chain management (3PL/4PL) by industrial and automotive sectors (which represent 16% and 28% of ISCS revenue respectively).

Geopolitical Risks

Operations across four continents expose the company to international trade regulations, taxation changes, and economic conditions affecting global supply and demand.

⚖️ Regulatory & Governance

Industry Regulations

Complies with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the Companies Act, 2013. Operations are subject to global trade and customs regulations across four continents.

Environmental Compliance

The company has a Risk Management Committee (RMC) that monitors sustainability and ESG-related risks.

Legal Contingencies

Not disclosed in available documents; however, the company maintains an internal audit function to ensure compliance with internal guidelines and statutory requirements.

⚠️ Risk Analysis

Key Uncertainties

Volatility in global freight rates (impacted GFS margins by 200 bps YoY) and the ability to sustain the 13% CAGR in the ISCS segment amidst global economic shifts.