TVS Supply Chain Solutions Q1 loss at Rs 65cr
Integrated Supply Chain Solutions segment reported 20% YoY increase in revenue and EBITDA was up 47%
TVS Supply Chain Solutions reported a net loss of Rs 65 crore for the first quarter of financial year 2024 compared to a loss of Rs 2 crore in Q1FY2023 and Rs 12 crore in Q4FY2023.
Profit before tax was down to Rs 48 crore due to increase in interest on borrowings by Rs 19.2 crore over Q1FY23 and a one-time non-cash exceptional P&L impact of Rs 23.2 crore on account of conversion of compulsorily convertible preference shares issued prior to the IPO and thereafter converted to equity at a discount to the IPO price, says an official release.
Revenue from operations dropped 12 percent to Rs 2,342 crore and adjusted EBITDA was up seven percent to Rs 179 crore.
Integrated Supply Chain Solutions segment (ISCS) reported a 20 percent increase in revenue at Rs 1,319 crore. ISCS revenue increased in all geographies (India, Europe, North America) both sequentially and YoY, the release added. "Expansion in existing engagements and new business development drove revenue growth. During the quarter, the company commenced a seven-year transformational engagement with Centrica. Some of the other key new customer wins/renewals included contracts with a German multinational technology company focusing on mobility, a specialised glass & materials company in India and a leading American solar technology company. Operating leverage helped deliver an adjusted EBITDA margin expansion of 190 bps YoY to 10.6 percent in Q1FY24 from 8.7 percent in Q1FY23 and of 140 bps QoQ from 9.2 percent in Q4 FY23. ISCS segment adjusted EBITDA was Rs 139.8 crore, up 47 percent YoY."
In the Network Solutions segment, the Integrated Final Mile (“IFM”) business continued to be resilient while the global forwarding business showed a decline in line with global trends, the release added. "Freight revenues were impacted by delay in volume uptake in air and ocean freight and subdued freight rates. NS revenue was Rs 1,023 crore, down 35 percent YoY. NS segment adjusted EBITDA was Rs 38.2 crore, down 53 percent YoY."
Ravi Viswanathan, Managing Director, TVS Supply Chain Solutions says: “We are witnessing a trend of increasing outsourcing of supply chain activities across industries that are resulting in expansion of existing engagements and a strong pipeline of new opportunities. This trend is a tailwind for growth of the ISCS segment where we have strong demand drivers in all geographies that we are present. India’s ISCS revenue has grown by 14.3 percent YoY reflecting the company’s ability to capitalise on the opportunities which the increased economic activity in India is presenting. Inflationary pressures are seen to ease off in both U.K./Europe and North America. Our sectoral mix of revenue has enabled us to grow YoY in double digits in both North America and Europe.”
Ravi Prakash Bhagavathula, Global CFO, TVS Supply Chain Solutions adds: “Q1FY24 showcased the inherent strengths in our portfolio and business mix. Our growth in the ISCS segment balanced the impact of subdued freight rates and delay in volume uptake in ocean and air freight. Our focus was on operational efficiency and cost reduction initiatives, resulting in expansion of adjusted EBITDA margins by 140 bps YoY. Overall profitability showed a decline because of higher interest cost and a one-time exceptional expense.”