Thank you. Good morning and very warm welcome to everyone.

On behalf of PhillipCapital, I am pleased to welcome you all on the earnings call of TVS Supply Chain Solutions Limited. We are happy to have the management with us here today for question-and-answer session with the investment community.

The management is represented by Mr. Vikas Chadha, Managing Director; Mr.

R. Vaidhyanathan, Global Chief Financial Officer; and Mr.

Karthik Venkataraman, Head Investor Relations. We'll begin call with opening comments from the management, followed by interactive question-and-answer session.

With this, I hand over call to Mr. Karthik for opening comments.

Over to you, sir.

Thank you, Vikram. Karthik here.

Good morning and welcome all to TVS Supply Chain Solutions' earning call for the quarter ended June 30th, 2026. I hope everyone had a chance to look at the financial results, which were posted on the company's website and on the stock exchange.

We have with us today Mr. Vikas Chadha, Managing Director; Mr.

R. Vaidhyanathan, Global CFO.

We commence the call now with opening remarks from our management, along with the business performance update. It will be followed by an open forum for question and answers.

Before we begin, a customary remark. I would like to point out that some of the statements made during this call may be forward-looking in nature and must be viewed in conjunction with the risks that the company faces.

A disclaimer to this effect has been included in the investor presentation, and I request and hand over to Mr. Vikas Chadha, Managing Director of the company, to make the opening remarks.

Over to you, Vikas.

Thank you, Karthik. Good morning to all of you.

Firstly, let me welcome all of you once again to our earnings call to discuss, as I would say, the robust performance for quarter 1 FY 2027. For the benefit of those participants who might be joining this analyst call for the first time, please note that TVS Supply Chain Solutions is a tech-led and asset-light supply chain solutions provider.

We have two main business segments, namely the Integrated Supply Chain Solutions, or ISCS as we call it, and Global Forwarding Solutions, or the GFS segment. We operate across four continents: Asia, Europe, North America, and Oceania, where we offer customer-specific solutions in the 3PL space, and also offer 4PL services in select markets.

For more details about the company, you may please refer to our website, www.tvsscs.com/investor-relations. Coming to the performance of our company, quarter 1 FY 2027 marked a path-breaking performance for us.

I don't think we could have asked for a better start for Team TVS SCS. We crossed 3,300 crores in revenue, the highest quarterly revenues with a growth rate of 29% on a year-on-year basis.

We achieved an adjusted PBT of 32.1 crores, a sizable increase from 18.8 crores in quarter 1 FY 2026. For this tremendous performance, I would like to thank all our customers and vendor partners, and most importantly, our employees and other stakeholders, without whom we would not have been able to achieve these key milestones.

There have been a sustained upward trajectory on year-on-year basis across regions and segments. In the ISCS segment, revenue from operations grew by 22% over last year.

India and Europe had a healthy growth, aided by new business wins, enabling our overall performance and improved profitability. North America business registered revenue growth, aided by the large project that went live last year.

Moving to the GFS segment, the revenue grew by 50.6% over last year, fueled by significant growth in volumes and new business wins. Team GFS did exceptionally well on ocean volumes, and specially in India.

Net net, for quarter 1 FY 2027, our consolidated revenue grew by 29% to 3,335.2 crores on a year-on-year basis and grew 10% on a sequential basis. As you heard earlier, I'm very pleased to state that both the segments delivered double-digit growth in this quarter.

On the profitability front, for quarter 1 FY 2027, the adjusted EBITDA was 232.2 crores as compared to 173.3 crores on a year-on-year basis and a very good growth of 34%, registering margin improvement of 30 bps to 7%. Continuing our last quarter wins of 500 crores, we had yet another landmark quarter where we have beaten our last quarter numbers on new business wins.

This has been earned from new logos as well as new business from our existing customers across both the business segments. Our new business wins accounted for 21% of our quarter 1 FY 2026 2027 revenues.

We have completed the acquisition of Swamy and Sons 3PL in quarter 1, and our results for quarter 1 include its performance for 40 days in the quarter. As you might be aware, we have already announced a joint venture with ALA Group following the MOU entered earlier in the year, which will help expand our footprint in defense and aerospace supply chain solutions.

We firmly believe that this new partnership allow us faster access to growing verticals, new geographies, and upstream opportunities in the value chain. We continue to be early adopters of technology and have integrated AI and robotics in our operations.

We have recently implemented Oracle ERP for our India ISCS business, which will help us make processes faster and allow customers and vendors to integrate with our systems well. On the warehouse side, we continue to add more automation and robotics.

Our transport management solution is now fully integrated with vendors and customers, providing efficient procurement and analytics dashboards to our customers. With this, I now hand it over to VB, our Global CFO, who will take you through financial highlights for the company.

Thank you, Vikas. Good morning to all.

Thank you for joining us today. This quarter, on a year-on-year basis, revenue grew by 28.7%, adjusted EBITDA grew by 34%, and adjusted PBT grew by 70.7%.

Before I get into the detailed financial performance, I would like to call out few key highlights. Our performance came in strongly due to the new revenue from new contracts as well as the benefits of the cost actions that we took last year.

GFS business posted a strong EBITDA margin of 4.1%. This was due to our strategy of pushing more volumes in select lanes in addition to the cost optimization initiatives that we implemented last year in this segment.

The margin was also aided by better sourcing efficiencies. I also want to highlight the significant growth recorded in the ISCS business.

Overall ISCS EBITDA margin was marginally lower at 8.1% due to the initial implementation costs that we incurred for the new contracts that we onboarded. This will stabilize in the coming quarters as those sites become fully operational.

Now I will take you through the detailed highlights of our financial performance for Q1 FY 2027. Our consolidated revenue for the quarter reached 3,335.2 crores versus 2,592.3 crores in Q1 FY 2026 and 3,032.2 crores in Q4 FY 2026, reflecting a year-on-year growth of 28.7% and a sequential growth of 10%.

India geography registered an impressive 44% year-on-year growth, aided by record new business wins and significant fall volume in the freight business. From a segment perspective, ISCS segment delivered strong year-on-year growth with revenue at 2,417 crores in Q1 FY 2027 versus 1,983 crores in Q1 FY 2026 and 2,283 crores in Q4 FY 2026, displaying a strong year-on-year growth of 21.9% and a sequential growth of 5.9%.

The growth was due to sizable revenue from the new business wins. GFS segment clocked a revenue of 918 crores in Q1 FY 2027 compared to 609 crores in Q1 FY 2026 and 749 crores in Q4 FY 2026, marking a significant growth of 50.6% year-on-year and 22.6% sequentially, largely led by the growth in the ocean freight volumes in India and the benefits of freight rate moving upwards.

Material-related costs increased from 484 crores in Q1 FY 2026 and 653 crores in Q4 FY 2026 to 666 crores in Q1 FY 2027, primarily due to the new businesses in India and increase in the volumes in North America and the Europe market. The movement in material cost and other related costs are in line with the change in the business mix in the ISCS segment.

Now moving to the cost structure: freight clearing, forwarding handling expenses increased from 680 crores in Q1 FY 2026 and 813 crores in Q4 FY 2026 to 991 crores in Q1 FY 2027, which is in line with the volume growth in the GFS segment. Employee cost: on a year-on-year basis, employee cost increased from 619 crores in Q1 FY 2026 to 676 crores in Q1 FY 2027 due to the cost inflation and in line with the revenue growth.

The cost increase was also partially offset by the savings through the cost takeout initiatives. On a sequential basis, the employee cost was 641 crores in Q4 FY 2026.

Subcontracting costs increased from 381 crores in Q1 FY 2026 and 407 crores in Q4 FY 2026 to 444 crores in Q1 FY 2027. This is in line with the revenue growth from the new customers.

Other expenses moved from 257 crores in Q1 FY 2026 and 297 crores in Q4 FY 2026 to 329 crores in Q1 FY 2027. This rise was primarily driven by the higher rental charges due to the increase in the short-term lease rentals.

Depreciation of right-of-use assets under Ind AS 116 increased year-on-year with depreciation increasing from 93 crores in Q1 FY 2026 and 108 crores in Q4 FY 2026 to 114 crores in Q1 FY 2027. Interest cost on lease liabilities under Ind AS 116 increased from 20 crores in Q1 FY 2026 and 25 crores in Q4 FY 2026 to 26 crores in Q1 FY 2027.

The increase in depreciation on leased assets and interest on lease liability is an account of the additional space taken for the new business wins. On the profitability front, our adjusted EBITDA grew by 34% year-on-year, with margins expanding by 30 bps to 7%.

Sequentially as well, adjusted EBITDA grew by 4.6%, demonstrating the consistency of the underlying earnings trajectory. With respect to the segments, ISCS delivered a strong performance in Q1 FY 2027 with adjusted EBITDA at 196.3 crores at 8.1% margin, up from 164.1 crores at 8.3% margin in Q1 FY 2026.

GFS delivered an improved performance in Q1 FY 2027 with adjusted EBITDA of 38 crores at 4.1% margin, up from 13 crores at 2.1% margin in Q1 FY 2026 and 18 crores at 2.4% margin in Q4 FY 2026. The margin improvement in GFS segment reflects the volume growth in India, results of the cost optimization initiatives previously undertaken in this segment, and also due to the benefit of better sourcing arrangement in the GFS segment.

We delivered adjusted PBT of 32.1 crores in Q1 FY 2027 compared to 18.8 crores in Q1 last year and 30.9 crores in Q4 FY 2026, reflecting the results of growth and operating leverage. PAT for Q1 FY 2027 was 22.5 crores as compared to 71.1 crores in Q1 FY 2026.

Kindly note that Q1 FY 2026 included an InvIT gain from previous ILP. Excluding the InvIT gain and the exceptional items in Q1 FY 2026, operational PAT was 8.8 crores, recording a year-on-year growth of 156% in Q1 FY 2027.

With this, I will hand it over to Vikas for the business updates. Thank you.

Thank you, VB, for the detailed analysis. I like to briefly touch upon our business development performance and pipeline strength, which reinforces our growth outlook.

In quarter 1, we recorded new business wins, which is an all-time high in a quarter of 543 crores, which represents 21% of our quarterly revenue, a clear sign of traction across key geographies. Our order pipeline remains robust at 7,500 crores plus, giving us a view of the road ahead for the coming quarters.

Across both ISCS and GFS, we saw wins from several marquee customers. On the ISCS side, we secured mandates from India and major international markets, including a leading Asia-based renewable energy provider, a specialist clean energy solution organization, a leading kitchen appliances manufacturer, a leading Indian consumer beverages company, a glassware and consumer product specialist in India, a premium motorcycle manufacturer in Europe, a global retail media and analytics company in Europe.

These wins reflect the diversity of our expanding customer portfolio, the strength in our tech-enabled execution, and the trust our customers continue to place in TVS SCS, which acts as a testimonial of our delivery capabilities. Particularly India continue to deliver exceptionally well on new business development with multiple large strategic wins across automobile, consumer products, and industrial.

These wins will drive revenue growth in the quarters ahead, specially in the ISCS business, where our positioning continues to strengthen across production, aftermarket, and distribution-led supply chains. On the GFS side, we added several customers, including global sustainable packaging solutions company, a multinational telecom equipment provider, a top engineering and technology expert, a leading industrial automation and robotics player, a leading home appliances wholesaler.

With this, we are now open for questions.

Good morning the team. I have two questions.

The first question to Mr. Chadha is beyond the regular outlook, what are the top two to three execution priorities you're focusing on in the next few quarters?

Alongside that, what do you see as the biggest risk in demand shifts, global competition, or regulatory changes? How are you preparing to manage them while strengthening TVS' Supply Chain's position in the logistics and integrated supply chain services?

Just want to understand a forward guidance on this. That's my first question.

I'll ask my second question after this. Thank you.

Thank you. Very good question.

Let me answer it in both the parts. The first part that you asked was what are our top priorities in the next two, three quarters.

I would say our top two, three priorities: the number one priority is growth. We've had growth from our existing customers by increasing the volumes.

We have also done a very good job of getting new business and also building our pipeline. That continues to remain our number one priority, and we will continue to grow our volumes with our existing customers and also growing and expanding our customer base.

I would say our second biggest priority is tech. We have invested a lot in technology in terms of warehouse automation and integrating AI and providing customers deep insights into their procurement and their inventory, etc.

We continue to work on this, and specially with Oracle deployed in our business now in India, we have more flexibility and we will be able to do a much better job on this. I would say my third strategic priority for the coming two, three quarters is partnerships and executing on the partnerships that we have already invested, and also looking for further partnerships.

As we acquired Swamy and Sons, so that acquisition is well on track and has got integrated. Our partnership with ALA Italy for defense and aerospace is getting executed and will start business in H2.

Hopefully, you will see further more partnerships coming because we firmly believe that in the value chain we can go faster in new geographies and also upstream opportunities by getting into partnerships. Your second question is on the biggest risk that we see going forward.

I think like any other company at this moment, the biggest risk that I see is a recession coming. Because of where the financial markets are today or because of the war situation, we have only seen first-level consequences of all of this today.

If tomorrow there are major supply chain disruptions causing recession, that will be the biggest risk. I would say, but we will not be the only one seeing that risk.

That's risk is going to be broadly spread across all the countries and across all the geographies. How we are mitigating that is we are in very, very close touch with our customers.

Fortunately, a lot of the supply chain work that we do embeds into the volume, the manufacturing volumes of our customers. We have got a very good visibility as to what is happening and how they are proceeding.

I would like to say that at this moment, we don't see this risk playing out. If there is something that will happen tomorrow, we will be one of the first ones to know it, and we can take the action proactively in terms of cost optimization, etc.

Thank you. My second question to Mr.

Vaidhyanathan is, again, along the similar lines, just want to understand from a financial point of view, what key risk or challenges do you anticipate in the coming quarters? What specific measures have been taken to manage margins, cash flow, and strengthen the balance sheet, especially in areas like fuel cost volatility, receivables, and compliance?

Thank you.

Sure. Thanks, Sukrit.

I think the question that you raise with respect to the margins and the risk to the margins, I think if you talk about, let's take example of the fuel cost. I think the way we do the contracting with the customer is that as and when there is a fuel cost increase, it is passed on to the customers.

I think that is how the contractings are done, not just in India, but across all the geographies, I think that is how the contracting is done with the customers. Whatever is a increase in the fuel cost, it is passed on to the customers.

Of course, there could be some time lag in terms of making a claim, but ultimately it gets passed on to the customers. Similarly, other biggest risk I would say is more in terms of the manpower availability.

I think this is a probably a full-year phenomenon, not just a particular season. Each geography has a different risk in terms of manpower availability.

There we focus on this in terms of having dedicated teams which ensure that the manpowers are available at the right time. Any increase in the cost is also passed on to the customers.

I think that is how we manage the risk. Of course, there are other risk in terms of interest risk and Forex, which we manage it from a treasury point of view.

At operationally, these are the risks and that is how we manage it, Sukrit.

Thank you, and best wishes.

Thank you, Sukrit.

Thank you, Sukrit.

Yes, hi, team. Good morning.

I wanted to ask on the ISCS side, because our revenues had increased quarter-on-quarter, year-on-year, but when we look at our EBITDA, it was down. What was the reason for such lower EBITDAs for this quarter, and how shall we look at the remaining quarter of this year?

I will take this, Saumil. This is VB here.

I will take this. Yeah.

I think the revenue came in very strongly, Saumil. Because of the new contract that we onboarded both in Q4 as well as in Q1, we obviously have to incur few implementation costs or transition costs initially when we onboard these contracts into our system.

That is why we had to incur some additional costs, and that is why you will see a marginal dip in the ISCS EBITDA from a percentage point of view. I think as these projects get up and running, I think this cost will go away and we should start seeing the margin moving in the upward trajectory.

I'm not too stressed about this marginal drop in the ISCS EBITDA margin. Once these projects are up and coming, the margins will start moving in the northwards.

I would just like to add to this that you can view this as a one-time. Going forward, I don't think this will have any reflection on our future margins.

It will be back to above 9%.

Correct. We have been guiding for few quarters that we shall be reaching at 4% PBT level by Q4 of this year.

How shall we look at it because we are still at around 1% PBT for this quarter. For the balance quarters, will it gradually increase towards the 4% PBT margin by Q4?

Look, let me answer that question. We have an aspiration to grow our revenues by mid-teens growth this year, and quarter 1 has been absolutely spot on.

Our margin is also improving from 0.7%, it has improved to 1%. It compares with the quarter 4 and quarter 1, and quarter 1 generally is a start of the year, a softer quarter, achieving 1% really is very, very good there.

Going forward, this will definitely improve as our revenue grows and as we have new opportunities. We definitely are trending and going towards the 4% aspiration that we have set ourselves.

Whether we will reach that 4% in this year-end, I would say it's our aspiration, but FY 2028, definitely we will be achieving our aspiration of 4%.

Okay. On the partnership with ALA Group for defense and aerospace, how are we looking at this?

Has the revenue started kicking in, or what could be the revenue potential?

Look, we aspire to reach almost 2,000 crores in year 5 of the operations. At this moment, aerospace and defense is a highly regulated and a certified vertical.

At this step, what we are doing is that we have finalized the warehouse. We have hired a couple of people who are getting trained in Italy, and we will get the certification of the warehouse because without that you cannot start the business in India.

By certification, it means that every part that is shipped out of the warehouse is completely tracked, where it has gone right from the source till the installation. All of that work is in progress.

We will see some revenue coming in the second half of this year. As I would say, this is the beginning of a partnership, which will also mushroom more as the aerospace and defense tech sector becomes more localized.

That is one of our government's biggest initiatives. Going forward, we will have much bigger numbers.

This year in H2, we will have our revenues commence for this particular venture.

Okay. Sorry, what did you say?

By year 5, we can have 2,000 crores? What did you say?

I didn't understand.

We believe that the potential of this particular joint venture is in the fifth year of running operations, we can deliver 2,000 crores out of this particular joint venture. It's a huge market, aerospace and defense.

Why we are so confident is: one, that ALA already has contracts with Boeing, Airbus, Dassault, and many of these large customers. As we establish the certified operations in India, a lot of those contracts will automatically be transferred to the joint venture, and these customers are buying today.

We have already had discussion with them, and they are looking forward to local supply being available, which will enable faster delivery and just-in-time delivery for them. That is why, because the existing business is already there, which the JV will do, that is why we are quite confident of achieving this number in the outer fifth year.

Yeah.

Correct. On the EBITDA side, will it be EBITDA accretive, or it will be on the similar lines as of now?

This industry being regulated, and entry barriers are very high, this will definitely be margin accretive. ALA Group as such was listed sometime back, and you can look at their financials.

Their PBT levels were almost in high single digits, this will be margin accretive for us. The customers in this industry pay for quality and pay for availability and traceability.

With all these elements that come along in the supply chain, the pricing tends to be on the higher side.

Okay. If I may ask last question.

Few days back, there was some amalgamation update between few of our companies with TVS Supply Chain. How shall we look at it as a shareholder?

What kind of equity dilution we can have, or what kind of benefits we can accrue through that?

Okay. Saumil, all these things are already 100% subsidiaries of TVS Supply Chain Solutions, and we are only merging these entities into a single entity.

Two, three things: one is there will be a lot of reduction in the compliance cost, right, because today each of these are separate legal entities. We have a separate audit cost, other compliance costs.

Once we merge into a single entity, I think there will be some savings on the compliance cost. The second thing is, obviously, at an operational level, today we go to the customers as a different legal entities.

Once the merger happens, I think we will be able to go to the customers as a single legal entity, TVS Supply Chain Solutions. Operationally as well, there could be a lot of ease of doing business.

At an overall level, there will be no dilution because all these things are 100% subsidiaries of TVS Supply Chain Solutions.

Correct. That's it from my side.

Thank you, and all the best.

Thank you, Saumil.

Thank you, Saumil.

Hi, sir. Congrats on a good set of numbers.

Most of my questions have been answered. Just one thing I wanted to understand is, as you mentioned that there were a couple of new contracts in the last couple of quarters in the ISCS business, because of which the margins were impacted as the costs are upfront, and as we scale up, the margin should normalize.

Just wanted to understand what are the timelines by which whenever a new contract is added, how many quarters does it take for it to give stable margins?

Thanks, Ankur. Let me answer that question.

Look, we are a specialty supply chain, integrated supply chain solution provider. Our contracts that we sign with our customers are to solve their problems and deliver the value that they seek from this partnership.

All contracts are a bit unique in nature, because some may have more in-plant work to be done, more subassembly work to be done, which could have a little longer gestation period, like maybe two quarters. Some contracts are more on the aftermarket side and scaling up the operations of finished goods, where the gestation period is just maybe one quarter.

In summary, we are not talking about years here, we're talking about just one or two quarters, depending on how the contract is. You can understand when a new project is starting, you will first establish the warehouse, you will set up the work while the volumes are not coming in, some of the costs go in.

As the volumes jump, we go back to our original estimated margins. One to two quarters is what I would say.

Understood. Thank you for that.

My next question is on our GFS business. We have seen good volume growth this quarter as well as jumping up of the margins towards the guided levels.

Were there any one-offs due to the war in this case, or are these margins going to be sustainable going forward?

Our freight volumes grew all across in India as well as in rest of the world. We saw more volumes growth on the ocean side, but air also saw substantial volume growth.

A lot of the work that we have done this quarter is also to do with the new wins that we have had with our customers, and a lot of this has been incremental in nature. Also remember, our margin is not only reflection of the new business that we are doing, but also all the cost optimization work that we have been doing in terms of consolidating our vendor base, etc.

While the growth may not be so high going forward, I am still confident of a very high double-digit number. I would expect the margins to by and large remain around this number and not get diluted too much.

All right. Understood.

That's all from my side. Thank you, and all the best.

Thanks, Ankur.

Hey, hi, thanks a lot. Sorry to harp on the same ISCS margin.

You have been adding new business each quarter, and you will have certain startup costs every quarter, right? It's a little surprising to see that sequentially, even with revenue growth, your EBITDA margins are down from 9.3% to about 8.1%.

If it's only related to startup costs, that's a big startup cost, right? Could you explain what's the one-off here?

Yeah. Thanks, Kunal.

Thanks, Kunal. See, I think what happened in Q4 normally happens in Q4 is we also get the benefit of the price corrections that we get from the customers.

That is why typically the Q4 will also have the, a lot of price correction that we get from the customers. That is why you will see a, a good margin of 9.3%.

As Vikas explained, Q1 is generally a soft quarter where, volumes bit come down. We also have the, the impact of the the implementation cost in few of the large contracts.

That is why I would I would do the comparison between Q4 and Q1: Q4 having the benefit of price correction from the customers, which was not there in Q1, plus the impact of the implementation cost.

Kunal, as I was explaining just to answer your question, we are a specialist player. When we enter into contracts, some of the contracts we are required to do more initial work to deliver the SLAs that we have for the customers.

It is not something that I'm worried about. It is not something that anybody should be worried about, because as these projects start rolling up and delivering the customer volumes, we will be completely back on track.

This move back to 9% is it that should happen in, say, quarter 2, or it's more like year-end phenomenon?

No, we will sequentially improve the margin, and I am fairly confident that even in quarter 2 itself, we will achieve 9%.

As I said, we'll start seeing it sequentially going up, and our plan is to take it to about 9.5% to 10% by Q4.

Sure. Sir, the other thing is on growth.

Both your businesses, ISCS and GFS, have grown much faster than what the previous guidance or discussions have been, and that's very heartening. How do you see the compact between growth versus margins?

Are we now gunning more for growth, and margins will sort of be a byproduct which sort of eventually will come through, or what are your thoughts on that? No,

we very firmly believe in profitable growth. We are not a company that will run after growth ignoring the profits.

All our projects that we win and that we pick up are accretive to our existing margins. All of you will see our profit growth having a bigger multiple as compared to our revenue growth.

We are aspiring to achieve in the full year mid-teens growth on the top line, and the margins will be definitely growing at a faster pace than that.

Got it. Thanks.

That's all from my side.

Hello, sir, am I audible?

Yes, Vinay, you are audible. Please go ahead.

Okay. Sir, like the previous participant asked that we are aiming for a 4% PBT margins, that will be 3% PAT margins, right?

Yes, at 25% effective tax, it will be about 3% PAT, yeah.

This delay in that margins are due to macro headwinds like the US-Iran war, I'm assuming? See,

it is a combination of factors, Vinay. One is the geopolitical things where, I think, as Vikas mentioned, in terms of overall recession, geopolitical risk, and as well as in terms of the GFS.

I think GFS, we saw a 4% EBITDA margin, and ideally we would expect this to be about 4.5% to 5%, and we want to hit that at least a 5% EBITDA margin in GFS for us to reach. I think it is combination of multiple factors.

Sir,

just to add on... Just to add, if you look at the trajectory where we have been moving, I think if you look at last year's Q1, if you can go to the P&L, you will see our PAT margin and PBT margin has completely interchanged because of the improvement in the trajectory between the PAT and the PBT.

You can see the improvement, and we will improve this trajectory in FY 2027 as we move towards that 4% PBT.

Sir. That's really helpful.

I was looking at an interview of Mr. Ravi Viswanathan with ET Now, and there it was stated that we are looking to expand into Africa and Middle East markets.

Is this still on?

Yeah. Let me answer that question.

As you know that we've got a very diversified portfolio. We are already present in 26 countries across four continents, and one of the most unique supply chain companies from that perspective in India.

Middle East and Africa has been on our radar for some time. We are in discussions with some companies in the Middle East.

We firmly believe that for a Middle East and Africa kind of a market, perhaps a partnership would be a faster way to get into that market. As soon as something crystallizes, we will definitely be coming back and announcing it.

It is a market which is of interest to us, though the interest because of the war, etc. we have to take more precautions at this moment.

Yes, we like the market and we are looking forward to entering into that market.

Sir. Can I ask one more question?

Sure.

We are aiming to reach early teens EBITDA margin, and Q2 is almost half done. Is the business moving towards that target?

Not like early teens in this quarter itself, but are we moving towards that target? That was my question.

The initial signs in Q2 has been very positive. Similar to quarter 1, the volume growth that we have seen the first 45 days, if I may say, are on fairly similar lines.

I don't see any reason why we should not be able to deliver the increased margin that we are mentioning. Yeah.

Sir. Thank you very much for answering my questions, and all the best.

Thank you.

Hi, team. A couple of questions on this new business engine.

We see this business development pipeline increased from 6,100 crore to 7,500. My question is that what percentage of this pipeline can realistically be converted over the next 12 months or maybe 24 months or so?

Thanks. Look, the pipeline, the past track record that we have had has been between 20% to 25%.

Now recently, we have had a lot of sales effort in increasing the pipeline, and the pipeline has gone up. I would say that in the 12- to 15- or 18-month period, definitely a similar conversion of 20% to 25% we should be able to achieve.

On this new order wins that we have, around 543 crores, if you can guide us to how much of this is from the new business or if we were supposed to compare it with the historical average, what is the average contract size over here?

The entire 543 is new business only. That's the first thing.

It is a combination of new business that we are winning with our existing customers and also new business that we are winning with completely new customers. All of this is new business only.

What happens in our business is that we might be doing for one customer, let's say, one warehouse, and we go ahead because they like our work, they give us another warehouse. That is counted here as a new business, because it is existing customer, but a new business.

In our investor deck, you will see that we have given the number of the new business, how it has gone quarter by quarter. I would say last two quarters has been very, very good in terms of how the new business has been there.

Last quarter also it was 524 crores, and this quarter it has been 543. In the past, we have had almost 200 to crores, etc., but the momentum in the last two, three quarters on new business has been absolutely fantastic.

Sir, what percentage would be new logo addition versus the ones from where we must be taking the new wallet share?

Rohit, I'll answer. VB here.

Probably, I would say roughly about two-thirds would be from the existing customers where we get new contracts, and one-third is probably the new logos. Probably I can give you the exact number, but at a broad level, I think this is direction, this is the number: two-thirds

and one-third, yeah. Steady-state EBITDA margin for these new wins, if you could share that over the next 3 years or so?

Now

as I said, ISCS is something we always aspire for about 8.5%, 9%, and that is what we keep targeting when we get into the new contracts. Obviously, if it's an existing contract, our margins could be slightly higher because we have the benefit of the existing team managing it.

If it's a new contract, it'll be almost 8.5%, 9%.

Also, you should look at the operational leverage, right? As we grow our business, some of the costs that are administrative in nature will get spread over a larger base.

I think the growth in the EBITDA margin will continue as we are growing the top line.

Makes sense. Thanks, team.

Thank you for answering my question. Thank you.

Thank you.

Thank you.

Hi, team. Congratulations and thanks for the opportunity.

Sir, I have first question on GFS side. If I understand that GFS, we are particularly operating in six to seven major line, which is the busiest route in the global.

Are we looking for any expanding the line? Second, key recently post-war, we have seen that there is a huge increase in the container cost, container availability, and container availability is also going down.

How much our revenue growth is because of this increase in container cost, and how much we are able to pass, and what are we really doing to mitigate that availability so that customer shipment are not delayed? Our billing is in foreign currencies, then what is the constant currency growth rate?

You have asked a lot of questions. Let me try and answer, and if I miss something, VB will jump in.

Our business in GFS, we are present in multiple countries, and obviously we engage with customers, many of our customers have been long-time customers for us, and we meet their requirement. If it means that for meeting their requirement, if we have to add a line or go to another line, we definitely consider that.

Our expansion of the line is not determined by us going into a line first, but it is more determined by the requirements of our customers and how do we engage with them, what is their requirement, etc. In terms of the costing, yes, the container costs, etc., even there on the air side also definitely went up.

The way our contracts are structured is that we pass on these costs to the customer, and eventually it is borne by the customer. I think it is pretty much visible in the way we have been able to deliver 4.1% EBITDA margins in this particular quarter.

The situation, the unavailability and all of that, we see this as an opportunity also because the team works very hard with the customers to find out opportunities to meet their requirements, and this has led to such high revenue growth in this particular quarter. I think the last question perhaps you had was on FX.

I would like to say that, since we operate in those local countries, our revenue and our costs both are in that local market, this has no impact on our profitability as such, because our procurement also happens in those particular markets. FX doesn't as such play a major role on our overall profitability numbers.

Great, sir. How do we see the managing this availability of container challenge which is already there?

Yes, look, all I would say is that freight has become a daily business at this particular moment. Because of the fluctuations, the changes that are there, the team has to fight on a daily basis to figure out how do we get capacity and how do we serve our customers.

The job has become tougher and more hours has got added, but I think our team is doing a fantastic job in terms of meeting the necessarily requirements of meeting the customer needs with the suppliers. I'm very proud of what the team has been able to achieve in quarter 1, and even in quarter 2, the initial signs that we have in the first 45 days continue to be very, very promising.

Yes, I understand there is a challenge out there, but I'm a very firm believer that every challenge there is an opportunity also, and it is for us as leaders to find out opportunities in the challenges.

Okay. Sir, one thing, since we have presence in so many countries, are we looking, say, less than container freight, air weight, kind of container there are specialized services, are we evaluating that at this moment?

Our focus is on, as I said, meeting our customers' demands. Now and if that particular customer has a specific need and then definitely we go out and try and meet any such requirement.

We are also focused on certain set of customers and certain verticals, and for those if there is a requirement of a partial container or air shipment or whatever mode of transportation, we go and figure it out.

Sir. With your permission, last question.

Sir, we were not present in the last-mile connectivity, and after acquisition last year that company we are also remain present. If you can give some color on the total avail market opportunity, and how we are really engaging our tech stack in those business to really make it more successful?

Where do you see this business over next 3 years?

TVS Supply Chain Solutions is a B2B company. Anything which has to do with delivery, etc.

on the customer side, consumer side, we are not present there. In the supply chain value chain that is there for B2B customers, we see more value in in-plant manufacturing, finished good warehousing, and aftermarket, and those are the focus areas for us.

I'm not saying that last-mile delivery for B2B is not something that is off our radar, but at this moment we see enough opportunity in the existing value chains that we are playing, and we are focused on those. However, having said that, we also believe in delivering end-to-end solutions for our customers.

If last mile is a part of that end-to-end solution, we have our respective vendors with whom we work and we deliver an end-to-end solution. The last mile in B2B is something that we keep on debating internally about, and as soon as something we see more clear on this, we will definitely come back.

Thank you, and all the best, sir.

Thank you.

Good morning, sir. This is particularly regarding the amalgamation and mergers that was announced for our subsidiaries.

I could see few of the subsidiaries' names was listed, but Fit 3PL Warehousing Private Limited, which was announced on September 2023, after that there was no major updates for the merger. Is there plans to merge Fit 3PL with TVS SCS, or is the plan called off?

I will take this question, Sai. I think Fit 3PL, I think we want to keep it as a separate entity, Sai, because there are some because of some GST reasons, we operate in a different GST mechanism for some of our FMCG customers.

We would like to offer those services from Fit 3PL, and that is why we would like to keep it as a separate legal entity instead of merging it with the parent company.

Understood, sir. The merger plan has been called off, merging is not going to happen.

It was not at all announced, Sai. Even in the original plan, Fit 3PL was not part of the merger, yeah.

Understood, understood. Thank you, sir.

Thank you.

Hi. Thanks for allowing me a follow-up.

As of now on the warehousing, we have about 25 million square feet capacity. What could be the capacity utilization of this warehouses?

The reason I'm asking is wanted to know on the same warehouse, how much more business can we do, because if we want to increase our PBT, this depreciation cost also has to be curtailed, right? If you could give me your views on the same?

Yeah. You will have to understand our business model a little bit.

We are not a company that will first go and search for a warehouse, set it up, and then search for customers. Majority of our warehouses are driven by a project and driven by a customer requirement.

By and large, when we enter into a contract for a warehouse, it is backed by a customer contract. This is the majority of the business.

If the volumes of that particular warehouse are going down, then we would typically cover it in the contract with the customer to ensure that we are not at a disadvantage. Having said that, we also have warehouses where multi-customer locations are there.

I would say by and large, our warehouses are fairly well utilized and in the vicinity of 85%, but there is definitely a room to improve, and we continue to explore investing more into even the rackings and automation for the warehouse so that we can increase the capacity of the warehouse.

Correct, correct. As and when we will have more customers, more revenues coming in, this depreciation cost will also increase simultaneously.

If it's a large project, it will increase, Saumil. Otherwise, we don't do typical warehousing alone.

We also do a lot of value-added activities apart from warehousing. Normally as a percentage of revenue, the warehousing cost will keep going down.

As Vikas mentioned, when the utilization also increases, there will be a benefit of that aspect. Correct, correct,

correct. Generally, in our kind of business, second half is generally stronger than the first half, or how is it quarter-on-quarter?

Normally, H2 is normally a strong quarter, especially Q4 definitely be a strong quarter for us, Saumil, in terms of thing, because we are present in multiple geographies, each geography has got a different thing. At an overall level, H2 will be better than H1, typically.

Okay. Sir, just one request.

I think yesterday the presentation was uploaded post 7:00 PM, and morning 9:00, we have a concall. If you could either delay the concall or maybe we could post the presentation earlier, it would be better.

I think that's a very fair feedback. You definitely need more time to digest the information, we will take this into consideration going forward.

Yes, please. That's it from my side.

Thank you.

Thank you, Saumil.

Thank you.

Thank you all for your time and intelligent questions and your continued interest in our journey. After this robust quarter 1 performance, we believe a very strong and reliable growth trajectory has been set for FY 2027.

On top of that, we continue to see further opportunities to strengthen our market position, enhancing operational resilience, and building deep relationships with our customers. Our focus remains clear: flawless execution on our customer conversion, retaining and growing our existing customers' business, continuing the disciplined implementation of our cost and productivity initiatives that we have set in motion.

I would like to personally thank all participants for your participation and invaluable inputs. Thank you once again for your support, and we look forward to engaging with you in the quarters ahead.