TVS Supply Chain Solutions (TVS SCS) reported robust double-digit growth in Q3 FY26, with revenue reaching ₹2,716 Crore, an 11.1% YoY increase. Adjusted EBITDA margin improved to 7.3%. The company also announced a strategic acquisition of Swamy & Sons 3PL Services (S&S3PL), focusing on the high-growth FMCG sector in India. This move is expected to be accretive to EBITDA, PBT, and RoCE, consolidating TVS SCS’s leadership in the Indian market.
Q3 FY26 Financial Performance Review
TVS Supply Chain Solutions showcased accelerating financial trajectory in the third quarter of FY26 (Q3 FY26). Total revenue reached ₹2,715.8 Crore, marking an 11.1% Year-over-Year (YoY) growth. This performance contributed to a 9-month (9M) FY26 revenue of ₹7,970.8 Crore, up 6.3% YoY.
Profitability metrics also showed significant improvement:
- Adjusted EBITDA for Q3 FY26 stood at ₹199.3 Crore, reflecting a 31.2% YoY surge.
- Adjusted EBITDA Margin improved sequentially to 7.3% (up from 6.2% in Q3 FY25).
- Profit Before Tax (PBT) for 9M FY26 reached ₹66 Crore, a substantial increase of +340.0% over 9M FY25 (₹15 Crore), with the margin reaching 0.8%.
Segment Performance: ISCS Drives Margin Expansion
The Integrated Supply Chain Solutions (ISCS) segment continued to drive margin expansion while Global Forwarding Solutions (GFS) delivered solid growth:
ISCS Performance (Q3 FY26):
- Revenue: ₹1,980 Crore (+6.9% YoY growth in the quarter).
- Adj. EBITDA: ₹183 Crore (+5.2% YoY growth).
- Margin: Increased to 9.2% from 8.1% in Q3 FY25.
GFS Performance (Q3 FY26):
- Revenue: ₹736 Crore (+10.0% YoY growth in the quarter).
- Adj. EBITDA: ₹17 Crore (+17.9% YoY growth).
- Margin: Contracted to 2.3% from 2.2% in Q3 FY25, though 9M FY26 margin stood at 2.2% against 3.2% in 9M FY25.
Geographically, ISCS in North America recorded the highest growth trajectory with a 20.3% CAGR over the last four years.
Revenue Growth Drivers and Pipeline
Revenue growth across Q3 FY25 to Q3 FY26 was strongly fueled by new business conversion, which translated to 13.0% of Q3 FY25 revenue. For the 9-month period, new business wins accounted for 9.1% of 9M FY25 revenues.
The Business Development Pipeline remains robust, standing at ₹6,300 Crore in Q3 FY26, up from ₹4,000 Crore in Q1 FY25, indicating strong future momentum.
Strategic Acquisition: S&S3PL
TVS SCS has entered into a definitive agreement to acquire 100% of Swamy & Sons 3PL Services Private Limited (S&S3PL) through its subsidiary, FIT 3PL Warehousing Private Limited. Key highlights include:
- S&S3PL generates over 70% of its FY25 Revenues from the India FMCG sector.
- Transaction Enterprise Value is INR 88 Crore (EV/FY25 EBITDA multiple of 4.7x).
- The transaction is expected to be EBITDA, PBT, and RoCE accretive to TVS SCS.
- The acquisition is anticipated to close during Q4 FY26, funded entirely through internal accruals.
Strategic Outlook: The 3C Approach
The company’s growth strategy follows the ‘3C Framework’ focusing on Customer, Capability, and Country, revolving around an ENCIRCLEMENT strategy to increase existing customer wallet share.
The presentation also showcased major domain expertise wins in Q3 FY26, including a three-year contract with Daimler Truck in India for end-to-end in-plant logistics management, supporting 700 employees.
Source: BSE
