TVS Supply Chain Targets Double-Digit Growth and 4% Profit Margin by FY26 After FY25 Turnaround

Mumbai, June 4, 2025: TVS Supply Chain Solutions Ltd (NSE: TVSSCS, BSE: 543965) is charting an ambitious roadmap for FY26, aiming for double-digit revenue growth and a 4% profit-before-tax (PBT) margin. This follows a solid financial comeback in FY25, driven by margin recovery, cost-cutting measures, and global client wins.

On June 4, 2025, shares of TVS Supply Chain Solutions Ltd (NSE: TVSSCS) surged 5.03% to close at ₹132.20, rebounding after four straight sessions of losses. The rally followed the company’s announcement of a strong FY26 outlook, aiming for double-digit growth and a 4% PBT margin by FY27. TVS posted a ₹29 crore PBT in FY25, recovering from a ₹10 crore loss in FY24, with consolidated revenue up 8.6% YoY to ₹9,996 crore. Strategic moves like cost cuts, a major ₹1,000 crore UK contract, and exiting low-margin deals helped boost investor confidence.

Despite the positive momentum, analysts remain cautiously optimistic. The company’s trailing twelve-month P/E ratio is -408.61, highlighting recent net losses, and its price-to-book ratio stands at 3.01. Based on current estimates, the 12-month median price target is ₹136, implying a modest upside of approximately 8.05%. The stock is still trading far below its 52-week high of ₹217.58, though well above the 52-week low of ₹107.40. Its market capitalisation is estimated at ₹5,832.6 crore.

The surge shows market confidence in the company’s transformation, though volatility in Global Forwarding Services and macroeconomic challenges remain concerns. Long-term success depends on TVS Supply Chain’s cost leadership and contract execution.

Strong FY25 Recovery After Previous Losses

TVS SCS delivered a remarkable turnaround in FY25, swinging from a ₹10 crore loss in FY24 to a PBT of ₹29 crore. The company posted a consolidated revenue from operations of ₹9,996 crore — an 8.6% year-on-year growth — fuelled by robust performance in its two core verticals: Integrated Supply Chain Solutions (ISCS) and Network Solutions (NS).

Segment-Wise Breakdown: ISCS Drives Growth, NS Recovers Margins

Integrated Supply Chain Solutions (ISCS): The ISCS segment recorded a 4.9% YoY revenue growth, with North America leading the charge — achieving a 9.2% sequential growth in Q4. Segment margins held steady at 8.6%, slightly lower than the previous quarter due to shifts in business mix.

Network Solutions (NS): NS delivered 13.6% full-year revenue growth, bolstered by strategic pricing and new client acquisitions. The Integrated Final Mile (IFM) division returned to profitability in Q4, lifting NS segment margins from 3.8% to 5.1%. However, the Global Forwarding Services (GFS) sub-division continues to face macroeconomic challenges including shipping container shortages and international trade tariffs. Management anticipates continued headwinds in this space through the first half of FY26.

FY26 Outlook: Scaling Growth and Margins

The company has outlined clear strategic levers for FY26 aimed at achieving sustainable growth and its 4% PBT margin goal by FY27:

• Aggressive Cost Optimization: Cost-saving initiatives such as reducing overheads, streamlining leadership, and shifting operations from high-cost to low-cost regions are ongoing. Redundancy-related expenses stood at ₹8 crore in FY25, with further adjustments planned through H1 FY26.
• Robust Order Pipeline: In FY25, TVS SCS secured new contracts worth ₹1,009 crore and onboarded 24 Fortune 500 clients. A major ₹1,000 crore UK retail distribution deal will commence in H2 FY26, providing predictable revenue.
• Strategic Exits to Sharpen Focus: The firm exited a low-margin UK ISCS contract, incurring a one-time cost of ₹13 crore in Q4 FY25. This move is expected to positively impact overall profitability going forward.

Financial Discipline and Capital Strategy

Capital expenditure in FY25 was entirely funded through internal accruals, reflecting operational efficiency. Net debt remained steady and was largely driven by working capital needs. Management is confident there will be no major debt spikes in FY26. Interest costs are being effectively managed across geographies using local currency financing strategies.

Leadership Comments: Margin-Focused Growth Ahead

“FY25 marked a decisive pivot for us. We have regained profitability, stabilized key businesses, and laid the groundwork for sustainable growth. With a strong pipeline and ongoing efficiency measures, FY26 will be a year of scaling and margin enhancement,” said Ravi Viswanathan, Managing Director.

 “Our focus is to reach the 4% PBT margin target by FY27 while maintaining double-digit revenue growth. The groundwork laid in FY25 through cost takeouts and segment realignments will begin to bear fruit in the second half of FY26,” added R. Vaidhyanathan, Global CFO.

Final Words

With operational momentum, a deep order book of ₹5,250 crore, and high-value customer acquisitions, TVS Supply Chain Solutions is poised to consolidate its global presence and deliver enhanced shareholder value in FY26. Strategic exits, global client wins, and process efficiency are expected to define the company’s trajectory toward sustained profitability.

REF: https://www.bseindia.com/xml-data/corpfiling/AttachLive/d414c9bf-aafa-495d-bb95-bca1ace83085.pdf

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