TVS Supply — Q3 FY26 earnings call

Call held 11 Feb 2026

Management summary

TVS Supply Chain Solutions reported a strong Q3 FY26, marked by double-digit revenue growth of 11.1% and significant adjusted EBITDA expansion of 31.2% YoY. The company's PBT turned profitable, improving from a loss of INR15 crores to a profit of INR25 crores. Both ISCS and GFS segments contributed to this growth, with ISCS showing strong profitability and GFS benefiting from volume rebound in India despite global freight pressures. The acquisition of Swamy & Sons is expected to strengthen the FMCG presence.

Highlights

  • Consolidated revenue grew 11.1% year-on-year to INR2,715.8 crores.

  • Adjusted EBITDA grew 31.2% year-on-year, with margins expanding 110 basis points to 7.3%.

  • Profit Before Tax (PBT) improved from a loss of INR15 crores in Q3 FY25 to a profit of INR25 crores in Q3 FY26.

  • ISCS segment delivered strong performance with 8.3% YoY revenue growth and margin improvement to 9.2%.

  • GFS segment revenue grew 19.3% YoY and 10% sequentially, with margins expanding to 2.3%.

Concerns

  • Global freight remains under pressure, impacting GFS segment despite volume growth.

  • Macroeconomic uncertainties and tariff volatility continue to affect the GFS segment.

Key financials

2 periods

Headline

  • Revenue
    ₹2,715.8 Cr
    YoY +11.1% QoQ +2%
  • Adjusted EBITDA
    ₹198.25 Cr
    YoY +31.2%
  • Adjusted EBITDA Margin
    7.3%
  • Profit Before Tax (PBT)
    ₹25 Cr
  • PBT Margin
    90%

9M

  • FY26 Revenue
    ₹7,970.7 Cr
    YoY +6.3%

What they filed

Q1 FY27: revenue up 28.7%, net profit down 69.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,513 2,445 2,499 2,592 2,663 +6%2,716 +11%3,032 +21%3,335 +29%
EBITDA190 151 169 177 182 −4%206 +36%218 +29%225 +27%
Net profit11 -24 -4 71 16 +45%11 +146%18 +550%22 −69%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹2,935.3 Cr Total
  • Integrated Supply Chain Solutions (ISCS) ₹1,979.5 Cr 67.4%
  • Global Forwarding Solutions (GFS) ₹736.3 Cr 25.1%
  • GFS India ₹219.5 Cr 7.5%

Capital allocation

high confidence
  • Capex ₹29.87 Cr
    No, the capex, I think we spent about 1.1% of our revenue, Rajit. I think we'll continue to do that, especially for the new projects, which will continue as per the previous years.
  • Debt Debt disclosed
    I'm only talking about, not the lease liability, I'm only talking about the bank debt borrowings. That will be about INR850 crores at the end of September.
  • M&A Swamy & Sons 3PL Acquisition · Announced

    Strengthens capabilities in FMCG and consumption-led supply chain space in India and deepens presence in key consumption markets.

    Expected to be EBITDA, PBT and ROCE accretive, with margins slightly higher than current business.

    We also announced the acquisition of Swamy & Sons 3PL in India. This is a strategically important acquisition that strengthens our capabilities in the FMCG and consumption-led supply chain space in India and deepens our presence in key consumption markets. The transaction is expected to be EBITDA, PBT and ROCE accretive and is fully funded through internal accruals.

Guidance & targets

Profitability

  • PBT Margin Profitability · FY27 · Medium confidence 4%
    Disha, we continue to remain focused on the 4%. It's an aspirational number that we will keep pushing at.

    — Ravi Viswanathan

Cost Savings

  • Project One Savings Cost Savings · FY26 · High confidence INR50-60 crores
    In the current year, Vikram, in FY '26, we expect about INR50 crores to INR60 crores savings coming out of it.

    — R. Vaidhyanathan

  • Project One Annualized Savings Cost Savings · FY27 · High confidence INR110-120 crores
    And as we said, on a full year basis, annualized basis, next year we see about INR110 crores, INR120 crores of savings.

    — R. Vaidhyanathan

M&A

  • Swamy & Sons Acquisition Closing M&A · Q4 FY26 · High confidence Q4 FY26
    In terms of what is the outlook for FY '27, the transaction is still not closed. I think probably we are expecting to close this in Q4.

    — R. Vaidhyanathan

Market context

  • Consolidated Revenue Growth Revenue · Future Quarters · Low confidence double-digit
    So we continue to push very hard for double-digit growth. To my entire leadership team, we pushed the messaging that we need to be focused on this double digit.

    — Ravi Viswanathan

What to watch in Q4 FY26

FY27 PBT Margin Target

FY27
Current 0.9% (Q3 FY26)
Target 4%

Why it matters

Achievement of this aspirational target is key to demonstrating sustained profitability improvement.

Disha, we continue to remain focused on the 4%. It's an aspirational number that we will keep pushing at.

Risks & concerns

  • Global freight market pressure

    medium

    Global freight rates remain under pressure, impacting the GFS segment's profitability despite volume growth.

    Global freight, however, remains under pressure, but our cost initiatives and volume rebound helped expand our adjusted EBITDA margins from 1.9% last year and 2.2% in Q2 FY26 to 2.3% in Q3 FY26.

    Management acknowledged

  • Macroeconomic uncertainties and tariff volatility

    medium

    These factors continue to impact the GFS segment, making the outlook cautiously optimistic.

    However, rates continue to remain under stress and the macroeconomic uncertainties and the tariff volatility continue to impact this segment.

    Management acknowledged

  • Customer in-sourcing of services

    low

    One large European project was in-sourced by the client due to internal organizational challenges and management changes at the client's end.

    This particular customer in Europe decided to in-source because of what I would call challenges internally. It was a very large outsourcing engagement, and I think the organization wasn't quite ready from change management perspective to roll out that.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Impact of trade deals (EU, US) on GFS and ISCS segments Partial
I will wait and watch. I think it's too early for us to say whether that's going to have an impact. Definitely, we're not factoring that in our Q4, but we are very bullish about what it could present for us in the next fiscal year.

Analyst inquired about potential benefits from upcoming trade deals, which management acknowledged as a significant opportunity for GFS in FY27 but too early to quantify for Q4 FY26.

Asked by Saumil Shah

Outlook for Q4 FY26 revenue growth given 9M FY26 growth of 6% Partial
So we continue to push very hard for double-digit growth. To my entire leadership team, we pushed the messaging that we need to be focused on this double digit. However, given the product mix that we have, which has got a fair amount of GFS, we'll have to wait for the GFS business also to start firing before we can say that we are firing on all cylinders.

Analyst questioned how the company plans to achieve double-digit growth for the full year given the 9M growth, highlighting the dependency on GFS segment performance.

Asked by Saumil Shah

Reason for sequential decline in employee costs Direct
Saumil, as explained, there was one large project in Europe where the customer had decided to in-source it, so which we had exited in Q2. That is why you will see a reduction in the employee cost, plus also the other, the Project One savings and other things will be reflected in the reduction in the employee cost.

Clarified that the employee cost reduction was due to the exit of a large in-sourced project in Europe and benefits from Project One savings, not general layoffs.

Asked by Saumil Shah

Rationale and financial impact of Swamy & Sons acquisition Direct
From a strategic perspective, FMCG was important because India is a very strong consumption-led economy... Swamy & Sons on average basis, their revenue is about INR200 crores, and their margins are slightly higher than our current business. So the transactions would be, from a margin point of view, it will be accretive both on EBITDA and PBT basis.

Management explained the strategic fit in the FMCG segment and quantified the target's revenue and margin accretive nature, providing clarity on the deal's benefits.

Asked by Disha Giria

Impact of new business wins and customer churn on margins Direct
No. I would say that from a margin point of view, no, we will not dilute the margin, no. I think as of now, the focus is on taking out the cost and keeping the margin profile as it is, right? So all the new business wins, we will continue to hold on to our margins that we are currently generating.

Addressed concerns about margin dilution from new business or churn, confirming that new wins are at healthy margins and cost actions are preserving profitability.

Asked by Vikram Suryavanshi

Reason for a customer in-sourcing a large project in Europe Direct
This particular customer in Europe decided to in-source because of what I would call challenges internally. It was a very large outsourcing engagement, and I think the organization wasn't quite ready from change management perspective to roll out that. And within a year of outsourcing, there was a change in their management and the new management came in and decided that in-sourcing of a crucial activity like supply chain needed to happen.

Provided specific context for a significant customer churn event, attributing it to internal organizational and management changes at the client, rather than service quality issues.

Asked by Vikram Suryavanshi

Realization and future scope of Project One savings Direct
In the current year, Vikram, in FY '26, we expect about INR50 crores to INR60 crores savings coming out of it... And as we said, on a full year basis, annualized basis, next year we see about INR110 crores, INR120 crores of savings. So all these things are permanent savings, which will flow into the next year as well.

Clarified the current year's savings from Project One and provided a clear, higher annualized savings target for the next fiscal year, indicating sustained benefits.

Asked by Vikram Suryavanshi

Request for customer count, employee count, and warehouse space data Evasive
All these data points are published on an annual basis, Rajit. So if you can please wait for one more quarter, we'll be able to publish that.

Management declined to provide these specific operational metrics for the current quarter, deferring to annual reporting, which limits real-time operational insight for investors.

Asked by Rajit Aggarwal

2 min read 5 chapters

Detailed narrative

Strong Q3 FY26 Performance Driven by Double-Digit Growth and Margin Expansion

TVS Supply Chain Solutions delivered a robust Q3 FY26, with consolidated revenue growing 11.1% year-on-year to INR2,715.8 crores. Adjusted EBITDA saw a significant step change, increasing by 31.2% YoY, and margins expanded by 110 basis points to 7.3%. This strong operating performance led to a positive Profit Before Tax (PBT) of INR25 crores, a substantial improvement from a loss of INR15 crores in Q3 FY25, with PBT margins improving from negative 0.6% to positive 0.9%.

ISCS Segment Leads Profitability Improvement, GFS Benefits from India Volumes

The Integrated Supply Chain Solutions (ISCS) segment was a key driver, with revenue growing 8.3% YoY to INR1,979.5 crores and adjusted EBITDA increasing 23.4% YoY to INR182.9 crores. ISCS margins improved from 8.1% in Q3 FY25 to 9.2% in Q3 FY26. The Global Forwarding Solutions (GFS) segment also showed strong growth, with revenue up 19.3% YoY and 10% sequentially to INR736.3 crores, primarily due to a sharp rebound in India volumes, despite global freight pressures. GFS adjusted EBITDA margins expanded to 2.3% in Q3 FY26 from 1.9% in Q3 FY25.

Strategic Acquisition of Swamy & Sons to Bolster FMCG Presence

The company announced the acquisition of Swamy & Sons 3PL in India, a move strategically aimed at strengthening its capabilities in the FMCG and consumption-led supply chain space. This acquisition, fully funded through internal accruals, is expected to be EBITDA, PBT, and ROCE accretive. Swamy & Sons has an average revenue of approximately INR200 crores, with margins higher than TVS SCS's current business, and the transaction is anticipated to close in Q4 FY26.

Project One and Cost Initiatives Yield Tangible Savings

The Project One program in the U.K. and Europe continues to progress well, contributing to margin recovery in ISCS Europe and overall profitability. The company expects in-year savings of INR50-60 crores from this program in FY26, with annualized savings projected to reach INR110-120 crores in FY27. These initiatives, coupled with broader cost takeout measures including rightsizing and tighter overhead control, are yielding tangible results and improving the underlying earnings trajectory.

Strong New Business Wins and Robust Pipeline

TVS SCS generated over INR319 crores in revenue from new business wins in Q3 FY26, representing 13% of Q3 FY25 revenue. For the first nine months of the year, new business wins totaled INR683 crores. The overall pipeline remains strong at approximately INR6,300 crores, providing clear revenue visibility. Key wins were secured across global renewable energy, automotive, industrial, technology, and consumer sectors, reflecting diversified demand and strong execution capabilities.

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