TVS Supply Chain Solutions posts loss of Rs 22 cr in Q2; revenue down 16%

TVS Supply Chain Solutions (TVS SCS), part of the Rs 15,000 crore TVS Mobility Group and one of the largest companies under the TVS fold, has posted a consolidated loss of Rs 22 crore during the second quarter of the financial year 2023-24, as compared to a net profit of Rs 38 crore during the July to September quarter of the previous financial year.

The company’s revenue from operations during the quarter under review was seen at Rs 2,262.9 crore, down 16 per cent compared to Rs 2,680.8 crore during the same period in 2022-23. On a consolidated basis, Q2 adjusted Ebitda margins expanded 100 basis points YoY as margin expansion in the integrated supply chain solutions (ISCS) segment helped balance the network solutions (NS)segment.

“We undertook two strategic interventions in Q2: sale of Circle Express business and sale of a partial stake in TVS Industrial & Logistics Parks. These two were classified as exceptional items in the quarter,” the company said in a statement.

The ISCS segment continued to deliver double-digit growth consistent with its performance in the earlier quarter. The Q2 revenue from ISCS grew 13.5 per cent YoY to Rs 1,269.5 crore. Expansion in existing customer engagements and revenues from new business development drove broad-based revenue growth across India, UK and Europe. New business wins in Q2 FY24 included a contract with a large Indian IT services provider, an industrial manufacturing company in India, a consumer goods business in the UK and a shipbuilding company in India. Strong execution delivered healthy margins with Q2 adjusted Ebitda margins expanding 240 bps YoY to 10.2 per cent and helped substantially balance the impact of the UAW strike and a scheduled plant shutdown in one of our large customers, it said.

Ravi Viswanathan, Managing Director, TVS Supply Chain Solutions Ltd said, “We continue to see robust demand for supply chain solutions across industry sectors and geographies. Our new opportunity pipeline is strong and we expect new business to continue to deliver. We are confident that our global presence, diversified revenue base and operational excellence will drive performance.”

Ravi Prakash Bhagavathula, Global CFO, TVS Supply Chain Solutions Ltd said, “We continue to focus on profitable growth and are implementing specific actions aimed at operational improvements. In Q2, we exited Circle Express, one of our businesses in the NS Segment, which will strengthen our focus on our core capabilities and also have a positive impact on profitability. The adjusted Ebitda margin expansion in the NS segment is an early outcome of these actions. We have utilised the proceeds from the IPO to reduce our borrowings as a result of which our interest costs were reduced in Q2, the full benefit of which will start flowing through starting Q3.