TVS Supply Chain Solutions Ltd. is hopeful of achieving its target of a 4% Profit Before Tax (PBT) margin by the end of FY27, driven by cost optimisation, a strong order pipeline and strategic transformation initiatives.
Speaking to NDTV Profit, Managing Director Ravi Viswanathan and Global CFO R Vaidhyanathan emphasised that this goal will be achieved through some key levers, including a turnaround in the United Kingdom business. The company has launched initiatives for key integration of businesses across the UK and Europe.
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“We would like to get to mid-teens on growth, given the pipeline and some of the advanced-stage large deals. There's every confidence that in FY27 we should reach early teens, if not mid-teens. But I think the key for us is the PBT. We are undergoing a strategic transformation and our commitment towards achieving a 4% PBT margin by Q4FY27 is what we are focussed on,” Viswanathan said.
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In its Q1 earnings presentation, the company shared a medium-term PBT margin target of 4% by FY27.
While revenue growth faces macroeconomic uncertainties, the management is confident that a robust order pipeline of Rs 5,300 crore will help in achieving double-digit growth by FY27.
“The larger segment is the global freight business, which is certainly dependent on the prevailing uncertainties. However, if you look at the integrated supply chain (ISC) business, it offers sustainable margin growth. On whether 10% growth in FY26 is possible, we look at the lead indicators, and the pipeline stands at Rs 5,300 crore and continues to improve. So, we are quite comfortable with that figure,” Viswanathan added.
To drive efficiency amid uncertainty, TVS Supply Chain is focused on cost control. CFO Vaidhyanathan highlighted that for this purpose, key initiatives include ‘Project One' to transform the UK and European operations.
“The one thing truly within our control is cost. We're taking several actions to rebase our cost structure. One of the key initiatives was the diaphragm turnaround, which is already yielding benefits this year. Similarly, ‘Project One', our initiative to completely transform operations in the UK and Europe, is well underway. All these actions are firmly within our control, and regardless of market conditions, they position us well to improve profitability going forward,” the CFO said.
In Q1FY26, TVS Supply Chain Solutions reported a 2.12% year-on-year (YoY) rise in revenue from operations at Rs 2,592 crore, compared to Rs 2,539 crore in Q1FY25. Ebitda declined 2.1% YoY to Rs 177.2 crore in Q1FY26, down from Rs 181 crore in the year-ago period. Ebitda margins were also down to 6.8% from 7.1%. The company's profit after tax in Q1FY26 surged nearly tenfold to Rs 71.2 crore, compared to Rs 7.5 crore in Q1FY25.
Shares of TVS Supply Chain Solutions Ltd. closed 7.86% higher at Rs 133.98 apiece on the NSE on Monday, compared to the benchmark Nifty50 settling at 24,585.05, up 0.91%.
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