TVS Supply Chain Solutions reports strong Q1 FY24 performance

TVS Supply Chain Solutions Limited has released its unaudited financial results for the first quarter ended June 30, 2023. The company has reported a strong performance, with significant growth in its Integrated Supply Chain Solutions (ISCS) segment and a solid presence in the Network Solutions (NS) segment.

The ISCS segment has shown remarkable growth, with revenues reaching INR 1,318.9 Crores, up by 20.1% compared to the same quarter last year. This growth was driven by expanding engagements and new business development, both in India and on the global stage. Notably, TVS SCS has embarked on a 7-year partnership with Centrica PLC, demonstrating its commitment to long-term collaborations. The company also secured contracts with key multinational technology companies and leading American solar technology firms.

Furthermore, the ISCS segment witnessed an impressive increase in Adjusted EBITDA, with a margin expansion of 190 basis points (bps) year-on-year, reaching 10.6% in Q1 FY24. This translates to an Adjusted EBITDA of INR 139.8 Crores, up by 46.7% from Q1 FY23.

In the NS segment, the Integrated Final Mile (IFM) business demonstrated resilience, while the global forwarding business faced challenges due to delayed volume uptake and subdued freight rates in air and ocean freight. NS revenues reached INR 1,023.5 Crores, showing a slight decline of 9.0% compared to the previous quarter and a more significant decline of 35.1% year-on-year.

Adjusted EBITDA margins in the NS segment were 3.7% in Q1 FY24, down from 4.0% in Q4 FY23 and 5.1% in Q1 FY23. This resulted in an Adjusted EBITDA of INR 38.2 Crores, a 52.9% decrease year-on-year and a 15.0% decrease quarter-on-quarter.

Overall Performance

The company’s consolidated financial performance revealed a shift in business mix towards the higher-margin ISCS segment. ISCS contributed 56.3% of consolidated revenue in Q1 FY24, compared to 41.0% in Q1 FY23, which led to an expansion of the consolidated Adjusted EBITDA margin. Profit before tax declined due to increased interest costs and a one-time non-cash exceptional expense of INR 23.2 Crores related to the conversion of compulsorily convertible preference shares.

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