We want to be a top 25 company globally: TVS Supply Chain Solutions MD

After becoming the first company in the TVS fold to get listed since 1994, TVS Supply Chain Solutions (TVS SCS), one of the largest integrated supply chain solution providers in India, has set a roadmap to break into the top 25 companies in the segment globally. The company’s Managing Director, Ravi Viswanathan, talks about the ongoing Red Sea crisis, growth strategy, and 2032 outlook in an interaction with Shine Jacob.

 

Edited Excerpts:

 

What is the impact of the ongoing uncertainties in West Asia on Indian logistics players like you?

 

One issue is that costs are going up because shipping companies are saying their expenses have increased -- like they have higher insurance, increased security, and all. There is a surcharge because of this. For companies like us, there is no benefit whatsoever. We are passing on the rate increase to the customer. We are not getting even a dollar of that price increase. If we were paying $2,000 per container before the crisis, today it is $3,000 per container. We are still getting the same benefits. This additional charge is coming because of the Red Sea surcharge. There is also higher demand.

 

 

Now, some companies are saying they are ready to go down the Cape of Good Hope with a longer time and a lower rate. That means containers are going to be used for them for a longer time too. That is creating a crisis. Some companies are also waiting for the Red Sea problem to be solved.

 

Do you think that higher logistics costs in India are affecting the country’s competitiveness in sectors like manufacturing, compared to competing countries?

 

If you look at the cost of logistics as a percentage of the GDP, the Western market is in single digits and ours is in the early teens (13-14 per cent). That is coming on the back of infrastructure challenges, restrictions we have in the movement of goods, delays like port congestion, and all. Because of GST, now we have freer movement of goods compared to what it was before. We have improved our turnaround time. We are doing a lot of things through digitisation to improve this.

 

For the financial year 2023-24, the company reported a loss after tax, and your revenue was also down by 7.9 per cent compared to the previous year. Are you seeing a recovery this financial year?

 

We have seen growth in our business, with revenues going up. If you look at FY25, it should be a much better year than last year. Our order book has never been this good. We are actually sitting on a pipeline of almost Rs4,000 crore -- the highest ever in our history. And all these are made up of high-quality accounts. We had around 50 Fortune 500 customers at the beginning of 2021-22, which increased to 78 now. This gives stability to our revenue.

 

Recently, we got a ‘We are not getting even a dollar from the price increase due to Red Sea crisis’Rs2,000 crore deal to transform the supply chain of the UK’s leading energy services and solutions company Centrica, which also operates British Gas. If you look at our pipeline post-Centrica, there is significant traction in large deals. In three years’ time, we would expect to touch $2 billion in revenue.

 

What is your future roadmap for global growth, as 70 per cent of your revenue is coming from the global market?

 

If I look at the 70 per cent global business, it is 60 per cent for the integrated supply chain solutions (ISCS), and network solutions have a share of 40 per cent.

 

We want to be a global top 25 company as we go forward, as the market expands, and increase our footprint in Fortune 500 companies. By 2032, we are hopeful of crossing $4 billion and participating in large deals too. Given our size, we should definitely grow much faster. We are bullish about India and global markets as well.

 

For us, the UK and India are large geographies, with Asia-Pacific following. Opportunities for us in the US are very high. It will continue to grow significantly. Growth sectors for the future will be consumer durables and the retail segment. We are in the e-commerce fulfillment side, and the aftermarket in the auto sector will be a huge opportunity for us. We are well-positioned to manage spares and servicing of electric vehicles.

 

Promoted by the erstwhile TVS Group and now part of the TVS Mobility Group, where do you see the share of TVS family companies in your business going ahead?

 

Today, the group company means only TVS Mobility. If you are talking about the larger TVS family, the number is still single-digit as a percentage of our overall revenue. That is a huge opportunity for us. We have penetration in all those companies, but the volume is not something that reflects the potential of that. Barring TVS Mobility, nothing is a related party. That is a big opportunity. We have a program called global account management, where we put large accounts under one dedicated person. What we have done is that we have put TVS as a global account to grow the relationship with each of the TVS companies.