Chennai: TVS Supply Chain Solutions Limited (TVSSCS), a global supply chain solutions provider and one of the largest and fastest growing integrated supply chain solutions providers in India, has announced its consolidated unaudited financial results for the third quarter, and nine months of FY 2024, with a PAT of INR 10 crore for Q3 FY24. The company has two operating segments: Integrated Supply Chain Solutions (ISCS) and Network Solutions (NS).
Integrated Supply Chain Solutions:
| In INR Cr
Integrated Supply Chain Solutions (“ISCS”) Segment |
Q3 Performance | 9m Performance | |||||||
| Q3 FY23 | Q2 FY24 | Q3 FY24 | QoQ Growth | YoY Growth | 9m
FY23 |
9m
FY24 |
YoY Growth | ||
| ISCS Segment Revenue | 1,109.1 | 1,269.5 | 1,272.1 | 0.2% | 14.7% | 3,325.5 | 3,860.4 | 16.1% | |
| ISCS Segment Adj. EBITDA | 110.4 | 129.5 | 133.8 | 3.3% | 21.2% | 293.1 | 403.1 | 37.5% | |
| ISCS Segment Adj. EBITDA margin % | 10.0% | 10.2% | 10.5% | 8.8% | 10.4% | ||||
The Integrated Supply Chain Solutions segment continues to deliver double digit growth consistently as in the earlier quarters. Q3 revenue for ISCS grew by 14.7% YoY to 1,272.1 crore. The revenue grew despite the impact of the UAW strike in North America. This growth was achieved through expansion in ongoing customer engagements and new business development. During the quarter, new business wins included contracts with a commercial / passenger vehicle OEM in India, expansion in engagement with an agri-equipment company in the US and Germany and a glass and materials manufacturer in India. The company’s operational discipline managed to offset the impact of the UAW strike during the quarter and drove its margin performance with Q3 Adj. EBITDA margins expanding 50 bps YoY to 10.5%.
The momentum in the ISCS segment was also evident from its nine-month performance. The revenue grew by 16.1% YoY from INR 3,325.5 crore to INR 3,860.4 crore and Adj. EBITDA grew 37.5% from INR 293.1crore to INR 403.1 crore translating to a margin expansion of 160 bps YoY.
Network Solutions:
| In INR Cr
Network Solutions (“NS”) Segment |
Q3 Performance | 9m Performance | |||||||
| Q3 FY23 | Q2 FY24 | Q3 FY24 | QoQ Growth | YoY Growth | 9m
FY23 |
9m
FY24 |
YoY Growth | ||
| NS Segment Revenue | 1,264.3 | 993.4 | 949.8 | -4.4% | -24.9% | 4,347.3 | 2,913.2 | -33.0% | |
| NS Segment Adj. EBITDA | 77.5 | 48.3 | 45.4 | -5.9% | -41.4% | 259.2 | 138.8 | -46.4% | |
| NS Segment Adj. EBITDA margin % | 6.1% | 4.9% | 4.8% | 6.0% | 4.8% | ||||
In line with the global trend of slowdown in freight, Global Forwarding Solutions (GFS) business saw weak volumes and pricing which continued to be in a narrow band. Given the developments in the Red Sea, ocean freight rates showed a spike, and the company keeps a close watch on the developments. The management focus continues to be on new business development to drive revenue and procurement & operational efficiency to improve margins. During the quarter, it has kicked off a number of cost optimization projects across the NS segment.
The NS Segment’s Adj. EBITDA margins remain consistent on a QoQ basis at 4.8% in a difficult revenue environment.
Summary of consolidated financial performance:
| In INR Cr | Q3 Performance | 9m Performance | |||||||
| Q3 FY23 | Q2 FY24 | Q3 FY24 | QoQ Growth | YoY Growth | 9m
FY23 |
9m
FY24 |
YoY Growth | ||
| Revenue from operations | 2,373.4 | 2,262.9 | 2,221.8 | -1.8% | -6.4% | 7,672.8 | 6,773.7 | -11.7% | |
| Adjusted EBITDA | 168.6 | 175.7 | 173.6 | -1.2% | 3.0% | 514.4 | 535.6 | 4.1% | |
| Adjusted EBITDA margin % | 7.1% | 7.8% | 7.8% | 6.7% | 7.9% | ||||
| PBT before exceptional items | 30.6 | -4.5 | 0.6 | 62.5 | -14.6 | ||||
| Profit Before Tax | 30.6 | -7.8 | 0.6 | 62.5 | -41.0 | ||||
| Profit After Tax | 17.2 | -21.9 | 10.0 | 57.0 | -63.1 | ||||
On a consolidated basis, Q3 Adj. EBITDA margins expanded 70 bps YoY with strong margin performance in the ISCS segment. Adj. EBITDA for the quarter was INR 173.6 crore. Consistent operational performance and reduction in interest expenses helped the business achieve break even with Profit Before Tax of INR 0.6 crorer in Q3 FY24 compared to a loss (before exceptional items) of INR 4.5 crore in Q2 FY24. Profit After Tax for the third quarter was INR 10 crore compared to a loss of INR -21.9 crore in Q2 FY24.
Ravi Viswanathan, Managing Director, TVS Supply Chain Solutions Ltd. said, “Our Q3 performance highlights the inherent strength of our business portfolio. We have been able to grow both revenues and margins in the ISCS Segment business consistently to help drive consolidated margins YoY. Our business development efforts continue to deliver results as expected and we see positive demand drivers across our geographies. We are confident on overcoming external challenges in global freight and growing our business profitably.”
Ravi Prakash Bhagavathula, Global CFO, TVS Supply Chain Solutions Ltd. said, “Our financial performance for the quarter, highlights our continued focus on operational efficiency which has been complemented with the full benefit of debt reduction. We have thus been able to demonstrate the business’ ability to achieve breakeven despite challenging external factors in one of our segments.”
The Board of Directors at its meeting held on February 5, 2024, has accorded its approval to the draft Scheme of Amalgamation which provides for the merger of TVS SCS Global Freight Solutions Limited, White Data Systems Private Limited, SPC International (India) Private Limited and FLEXOL Packaging (India) Limited which are wholly owned subsidiaries of the Company, and Mahogany Logistics Services Private Limited (formerly known as ‘DRSR Logistics Services Private Limited’) with and into TVS Supply Chain Solutions Limited.
The Scheme would be subject to the sanction and approval of the National Company Law Tribunal, the relevant stock exchanges and shareholders. The Scheme, when approved by all the regulatory authorities and relevant stakeholders, will be accounted for in accordance with Indian Accounting Standards, the company said in a media release.
