TVS Supply Chain Solutions Limited (TVSSCS) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the TVS Supply Chain Solutions for Q4 and FY26 Results Conference Call hosted by Philipp Capital, India. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements do not guarantee the future performance of the company and it may involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vikram Suryavanshi from Phillip Capital, India. Thank you, and over to you, sir.

Thank you. Good morning, and very warm welcome to everyone. On behalf of Phillip Capital, I am pleased to welcome you all on the earnings call of TVS Supply Chain Solutions Limited. We are happy to have management with us here today for question-and-answer session with the investment community. The management is represented by Mr. Ravi Vishwanathan, Managing Director, Mr. Vikas Eda, Global Chief Executive Officer, and Mr. R. Vadyanathan, Global Chief Financial Officer. We will begin call with the opening comments from the management followed by interactive question-and-answer session. With this, I hand over call to the management for opening comments. Over to you, sir.

Hi, this is Karthik here. I hit IR. Thank you, Vikram. Good morning, and welcome all of you to TVS Supply Chain Solutions earnings call for the quarter and year ended March 31, 2026. I hope everyone had a chance to look at the financial results, which were posted on the company's website on the stock exchange yesterday. We have with us today Mr. Ravi Vishwanathan, Managing Director, Mr. Vikash Shadda, Global CEO and MD-designate, and Mr. R. Vaidhinathan, Global CFO. We commence the call now with opening remarks from our management along with the business performance update. It will be followed by an open forum for questions and answers. Before we begin, a customary remark. I would like to point out that some of the statements made during this call may be forward-looking in nature and must be reviewed in conjunction with the risks that the company faces. A disclaimer to this effect has been included in the investor presentation. And I request and hand over to Mr. Ravi Vishwanathan, Managing Director of the company, to make the opening remarks. Over to you, Ravi.

Thank you, Kastik, and good morning to all of you. Firstly, let me welcome all of you once again to our earnings call to discuss the performance for the fourth quarter and year-ended March 31, 2026. We have had a spectacular finish to the year, and I am excited to share with you the highlights of our performance. I am joined today by my colleague, Vaidhi, our global CFO, who will take you through the analysis of our numbers, and Vikas Chadha, our global CEO and MD-designate, who will walk you through the business updates. We look forward to interacting with you as part of the Q&A session. For the benefit of those participants who might be joining the analyst call for the first time, please note that TVA Supply Chain Solutions is a tech-led and asset-led supply chain solution provider. We have two main business segments, namely the Integrated Supply Chain Solutions, or ISCS, and Global Forwarding Solutions, or GFS. We operate across four continents. Asia, Europe, North America, and Oceania, where we offer bespoke and tailor-made solutions in the 3PL space and also offer 4PL services in select markets. For more details about the company, you may please refer to our website, www.tvsses.com slash investor relations. After the performance of our company, FY26 marked a strong turnaround year for us. We crossed 11,000 crores in revenue with a growth rate of 10.1%. We achieved an adjusted profit before tax of Rs. 99.3 crores, which is a significant improvement from Rs. 37.3 crores in FY25. Thank our customers and vendor partners, employees and other stakeholders without whom we would not have been able to achieve. has been more diversified.

Indian value retail chain player, North America-based manufacturer of lifting equipment. YouTube services space. We strengthen our tech-enabled execution and trust our customers continue to place in TVS supply chain solutions. Thank you. We are personally well on business development with multiple laws. The ISCS business where our positioning

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Sukrit Patil with EyeSight FinTrade. Please go ahead.

Good morning to the team. I have two questions. The first question is... How is TVS supply chain preparing to capture future opportunities in global logistics, warehousing, and supply chain technologies, while possibly addressing challenges such as geopolitical disruption, driving cost, and digital performance?

Sorry to interrupt. You are coming out very clear. We are not able to hear you clearly.

Yes. Sorry. Am I audible now? Sorry for the delay. I just want to understand, in your point of view, how is TVS supply chain preparing to capture future opportunities in global logistics, warehousing, and supply chain technologies, while thoughtfully addressing challenges such as geopolitical disruptions, rising costs, and digital transformations? What strategic levers do you see most important for sustaining growth and maintaining the leadership in FI? Just want to understand your point of view on this. Thank you.

Always maintain that we are a tech leader.

Thank you. My second question to Mr. Vaidyanathan is, from a technical point of view, how is the company optimizing its capital structure to balance growth investments in logistical infrastructure and technology while still maintaining the debt? Especially given the capital-intensive nature of global supply chains, can you elaborate on the framework we use for cash flow forecasting, interest rate risk management, and working capital efficiency to ensure liquidity while still maintaining the profits? Thank you.

Sure, Sakrit. I think there's a lot to be covered. Okay. On capital allocation point of view, I think we have a very clear focus. As we always say, we are an asset-like business.

Thank you, and best.

To all participants, you may press star and one to ask a question. The next question comes from the line of Angkor Potar with Swan Investments. Please go ahead.

Good morning, sir. Congrats on Angkor's set of numbers. So, my first question is regarding our GFS business. Because of the disruptions in the geopolitical situation currently, are we facing any disruptions in our routes where we operate, which, so that is the rest of the world GFS, and also if you can throw some light on how our India GFS, the outlook of India GFS business going forward for FI27.

Okay, first is, you know, We have two planes which are in the West Asian zone. So, it's really about. So, we do see disruptions, especially in the smooth flow of traffic. But having said that, the India business has had tremendous... I'm not particularly worried about C4.

My second question is regarding the ALAS MOU that we had signed recently. Is there any update on that, and do we see any visibility coming in in FY27?

Probably too early to say, Ankur, but we just recently signed, so we are early days, but you will hear updates from us in the near future on how we plan to... Thank you. And that's the reason.

That's great. And finally, if you could just share the growth outlook for your ISCS business also within India as well as rest of the world. So that's Europe and USA.

Sure. Look, I think there are a lot of positives.

All right. Thank you.

That's all for my sake. Thank you. Participants, you may press star and want to ask a question. The next question comes from the line of Disha with Sapphire Capital. Please go ahead.

Hello. Am I audible, sir?

Yes, Disha, please go ahead.

Yes, thank you so much, sir, for this opportunity. So, again, my first question was on the GFS segment, sir. You've seen the Indian volumes rise drastically, sir, for this quarter. What were some of the reasons for that, and how has Q1 been so far, sir?

I will probably not speculate on Q1 as yet, but let me just say Q4 is on the back of some significant businessmen. I think Vikas spoke in his commentary about a lot of new wins that we had this quarter, and the volume growth is coming on the back of that, and we continue to get significant new wins in both ISCS and the GFS sector. So, I would say we are seeing both volume growth for what we call an encirclement or cross-selling within existing customers showing growth, but also new customer wins that are fueling the GFS volume growth.

And we do expect this momentum to continue, right?

I remain very optimistic, Disha.

And how should we look at the EBITDA margin, sir, for FY27, because we have seen high traction from the ISCS segment as well. So how should we look at the EBITDA margin?

Disha, I'll take this right here. See, on the ISCS, I think right now we are about 9.3%, and we should be range-bound between 9.5 to 10% on the ISCS from a margin point of view. And, you know, as Ravi said, with all the large customer wins, and also the operating leverage actions that we have taken, I think will be somewhere between 9.5 to 10% on ISDS.

And for the overall margin, sir, for part 27?

Yeah, I mean, it all depends on, as Ravi said, on the GFS trajectory in terms of the freight rates and all that. But I would say somewhere between, you know, right now we are at 7%, it should be around 7.3, 7.4% on the adjusted EBITDA. I think a lot depends on how the GFS trajectory moves.

Disha, I will just be cautious about GFS, given the geopolitical situation. Like I said, we are bullish about the volumes, but we have to keep a very close eye on the rates. It's been very volatile, and we'll keep you updated on this as we progress. We have a very clear understanding of how we will... You know, get better leverage on the ISPS business. On the GFS, I'll still be cautious because it is all about customer relationship, deep customer relationship. We will continue to focus on... Thank you.

Yeah, fair enough. And also, sir, we have a robust order pipeline. What sort of conversion are we looking at for F527? And do we see majority of orders flowing in?

Our typical conversion, like we have said in the past, has been around 22%. So, you know, we look at that, you know, hopefully we keep improving on that. But that's typically what our conversion ratios have.

Okay, that is very helpful. That's it from my side. Thank you, sir.

Participants, please press star and want to ask a question. The next question comes from the line of Rohit Auri with Progressive Shares. Please go ahead.

Hi, team. Congrats on this turnaround. Couple of questions from my side. First one, being on China Plus One and the U.S. firms which are trying to eye India, if you can take us through which are the sectors which these guys are actually looking at and which could probably be the strongest relocation candidates where you see momentum or anything on the current pipeline if you'd like to share.

So, you know, the China Plus one, we do see a lot of... But none which has got very deep, but you did see a few examples of things that we did with multinationals. We have shared some of the media, some of the...

Is it possible to share that when we compete with these global 3PL players, what sort of operational capability that we portray that the competitors are still underestimating about EVS?

I don't want to talk about what the competitors understand about it. I think the key strength for us is that we have a very strong... It's something which...

So, we did mention about these new businesses that are coming through and the new sectors, which you just alluded in your previous comment as well, along with aerospace defense or maybe energy and renewables. But what are these certifications that you think are a critical bottleneck in India currently? And how sticky are these contracts or maybe how deeply embedded are they with TV supply?

Are you talking about existing contracts that we have?

Existing contracts as well as the one which might come maybe in the next three years or so.

I mean, the existing contracts, the stickiness is what you create. It's really about, you know, I think I spoke about it in my opening commentary, that we have very deep customer relationships and the flexibility that we have had in terms of... In terms of engaging with the customer during different cycles of the business environment, especially the volatile environment that we have seen over the last couple of years. But if you take a look at...

On this aero supply chain services, what sort of lessons do we have from the U.K. defense logistics, which you think are transmitted to India currently?

I think the key is for us to understand how defense organizations work.

So on the guidance aspect, by 2930, do you think that I know top line is not an issue for us, but then with the sustainable EBITDA margin, maybe like 12% or 13%, do you think that we can reach somewhere around 15,000 crore by 2930?

I will leave that question to Vikas for the future, but clearly that is something which we have shared with you in the past, right? Look, for us, we keep talking about continuously expanding our EBITDA margins. We have shared in the past that the benchmark EBITDA numbers are in the early teens, and that's our aspiration. So we think in the medium term, we should get to about 10.5-11% in IACS. We hope that we can push the GFS margin, maybe this is not the year, but in the next, you know, four to eight quarters, move it closer to 5% and hopefully settle at about 6-6.5%.

Last one from my side, if we were to revisit TVS and maybe FI 30, what matrix beyond the revenue would convince the management team that the strategy is actually truly worked?

So, first and foremost, I think we are focused on profitable growth. So, profitability is something which is a very key driver. Our trajectory has been good, and we want to continue on this trajectory. So, profitable growth is number one. Number two is continue to mine our existing customers.

Okay, sir. Thank you for answering my question. Thanks a lot.

Thank you. A reminder to all participants, you may press star and want to ask a question. The next question comes from the line of Vikram Suryavanshi with Philip Capital. Please go ahead.

Good morning and congratulations on very strong numbers, sir. Yes, sir, I wanted your comment on our, if you look at segment-wise, our profile between India and Europe, I think it's pretty diversified between automotive, consumer, industrial, healthcare, and other segments.

But U.S. business is mostly dominated by only two segments.

So, how is the growth outlook there and then diversification possibility in U.S., particularly in Atma market?

on a very strong account-centric plan, right? So we have picked industrial and So, if you look at U.S. over the last five years, we've been growing at about 28.3% Kager. And we really think that the opportunity in the U.S. is with large customers, we should be able to get a significant size of the pie. Previously, we, you know, five years back, U.S. was really a scattered map, but today we are getting deeper into fewer. And we want to grow each of these customers because those are the customers who typically can deliver 50, 60 million dollars of annual revenue. And if we can create a portfolio of four or five such customers, that will give us a very, very strong foundation on which then we can expand the U.S. market. So our current focus remains on industrial vertical and the auto vertical. There are a lot of opportunities, but we...

Got it. But apart from this industrial and at all, are there any back-end challenges for us to add newer verticals or it is not a focus area as of now?

I think it's really about what we want to focus on. I think we want to make sure that the management bandwidth is really...

Understood. And we have very strong new business wins this quarter. So, internally, do we have like a percentage of revenue to target as a new business win as an internal target? And do we also look at the customer churn basically as one of the indicator or any target internally or it's more on a new business win only?

The customer's journey is something which, in this...

You will find that Okay, and just last question, integrated final mile, basically you don't give separate numbers, but in terms of understanding, are we seeing improvement in there also materially, or it was like an integrated supply chain which has driven the profitability, just to get some idea about between two, how things are going?

Let me just ask, why do you answer that? But from our perspective, we have integrated that business, but you know, you could probably dwell.

Got it, sir. Thank you very much.

Thank you. The next question comes from the line of Kunal Sabnes with Nine Rivers Capital. Please go ahead.

Hi. Thanks a lot for the opportunity. First of all, congratulations to the team. All that you have been saying for a while, that turnaround has been seen in numbers for the last two quarters, and this quarter has been an improvement over the previous one. So, congratulations. I have two questions. First is on the ICS business, right? It's heartening to see that ICS has grown a QOQ as well. So, easy. Actually, growing at like 18-20%, is that a possibility going forward, primarily on the ICS, which is a sticky business and then has higher margins?

We all just had the expectations that, given what we can see, we are very confident of double digits, we are very confident of... But, um, Absolutely, yes. If we can convert some of the larger deals, and if our conversion ratio increases, I don't see that as a difficult thing. But that's the focus of the company, to see how we can increase the conversion rate of our pipeline.

Got it. And considering the top line is growing, and the EBITDA overall, you expect... The margin from here on has to sequentially grow, right? I mean, Got it. The last one is on the exceptional items. Is there any reason why this labour provisioning was not taken entirely in quarter 3 and some has come in this quarter?

Yes, Kunal, I'll take this right here. See, there was a labour ministry clarification which came in March 16th after we declared the Q3 results, because of which we had to once again do a reassessment and take an additional provision. And that clarity was not there when we closed the Q3 numbers. And as you know, there are still a lot of grey areas and there are a lot of interpretations as well. So I think that is what is the reason for that. But that's entirely taken now.

And one last thing is on the impairment of the loss on financial instrument. That's a sizable number as compared to your profit, right, about 17.6 crores. And that's sort of recurring every quarter. What does this pertain to and what can we expect?

Customers are all high.

So you have totally booked about 56 crores for fiscal 26. This sort of rate percentage to revenue should continue? It should be lower in a fire. Thanks a lot, and wish you luck for the future.

Thanks, Kunal.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for their closing remarks.

Thank you. Thank you for all your time, questions, and continued interest in our journey. As we look forward to FY27, we see significant opportunities to strengthen our market position, enhance operational resilience, and build deeper relationships with our customers. We also recognize the challenges that lie ahead from the macro to structural shifts in the global supply chain. Our focus remains very clear, executing on our renewed customer conversion growth story. And continuing the disciplined implementation of our cost and productivity initiatives, which we have set in motion, scaling segments and driving long-term value creation through disciplined customer-centric growth. I would like to personally thank all participants, both present and from the past, for your participation and valuable inputs. As all of you would be aware, this would be my last earnings call. I am confident that under the leadership of Mr. Vikas Chadha, the company would soar to great heights. I want to thank you once again for your support, and we at TVN this year look forward to engaging with you in the quarters ahead.

Thank you, sir. I would now like to hand the conference over to Mr. Arushal Shah from Philippe Capital, India.

We thank the management of TVI Supply Chain Solutions for giving us an opportunity to host the call and taking time out for interaction with the stakeholders. Thank you all for being on the call.

Thank you. Ladies and gentlemen, on behalf of Philippe Capital, India, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.