Witnessing a trend of increasing outsourcing of supply chain activities across industries: TVS SCS

Chennai: TVS Supply Chain Solutions was witnessing a trend of increasing outsourcing of supply chain activities across industries and a strong pipeline of new opportunities, a top official said.

The city-based firm had registered a consolidated net loss for the April-June 2023 quarter at Rs 65.3 crore as compared to a net loss at Rs 1.8 crore during the corresponding quarter of last year.

Revenue from operations during the quarter under review stood at Rs 2,342.4 crore from Rs 2,675.5 crore registered in the same period of last year.

The profitability showed a decline due to higher interest cost and a one-time exceptional expense of Rs 25.57 crore during the quarter, a company statement here said.

The Integrated Supply Chain Solutions business performance was driven by a very strong growth momentum with the segment reporting a revenue of Rs 1,318.8 crore during the April-June 2023 quarter from Rs 1,097.7 crore registered in the same period of last year.

The ISCS segment revenue grew in India, Europe, North America both sequentially and year-on-year. The expansion in existing engagements and new business development drove the revenue growth, the company said.

The Network Solutions segment continued to be resilient while the global forwarding business showed a decline in line with global trends.

Freight revenues were impacted by delay in volume uptake in air and ocean freight and subdued freight rates, the company said.

The Network Solutions segment revenue during the quarter under review was at Rs 1,023.5 crore from Rs 1,125.1 crore registered in the same period of last year.

Commenting on the financial performance, TVS Supply Chain Solutions Ltd Managing Director Ravi Viswanathan said, "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," he said.

"India's ISCS revenue has grown by 14.3 per cent year-on-year reflecting the company's ability to capitalise on the opportunities which the increased economic activity in India is presenting," he said.

TVS Supply Chain Solutions Global CFO Ravi Prakash Bhagavathula said, "Q1 FY24 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. Overall profitability showed a decline because of higher interest cost and a one-time exceptional expense," he added.