TVS Supply Chain Solutions has signed a strategic Memorandum of Understanding (MoU) with Japan's Sankyu Inc. to collaborate on supply chain and engineering services, with Sankyu planning to acquire a 0.5% stake in the company.

Partnership details

The collaboration between TVS Supply Chain Solutions and Sankyu Inc. is aimed at jointly exploring expansion in supply chain and engineering services. As part of the arrangement, Sankyu plans to purchase a 0.5% share in TVS Supply Chain Solutions.

The partnership brings together TVS Supply Chain Solutions' extensive supply chain capabilities and market presence with Sankyu's engineering expertise and long-standing relationships across the Japanese industrial ecosystem. The companies will explore opportunities to deliver enhanced value through a broader portfolio of solutions spanning logistics, warehousing, transportation, engineering services, maintenance and on-site industrial support.

Strategic scope

The collaboration will initially focus on opportunities in India, where both companies see significant potential to support manufacturing and industrial customers. With more than 1,400 Japanese companies operating in India across manufacturing and industrial sectors, the partnership is well positioned to support their evolving supply chain and engineering requirements while also serving a wider customer base.

Over time, the collaboration is expected to expand into other markets across Asia, the Middle East and Africa, leveraging the combined capabilities of both organisations. The companies will also explore opportunities in other global markets where both have an established presence.

To drive the collaboration, the companies will establish a joint steering committee comprising representatives from both organisations. The committee will identify growth opportunities, oversee strategic initiatives and support the development of integrated solutions aimed at delivering enhanced value to customers and other stakeholders.

TVS Supply Chain Solutions reported robust top-line expansion for the quarter ended June 30, 2026 (Q1FY27), with consolidated revenue rising to ₹3,335.2 crore from ₹2,592.3 crore in the corresponding period of the previous year. This represents a year-on-year growth of 28.7% and a sequential increase of 10% over Q4FY26. The company achieved an adjusted EBITDA of ₹232.2 crore, up 34% year-on-year, with adjusted EBITDA margins expanding by 30 basis points to 7%. Adjusted profit before tax (PBT) surged 70.7% to ₹32.1 crore, demonstrating significant operating leverage.

The Board of Directors approved the unaudited standalone and consolidated financial results on August 10, 2026. The results were published in compliance with Regulation 47 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company’s statutory auditors carried out a limited review of the financial statements. Management highlighted that the strong performance was driven by new revenue from contracts and benefits from cost actions taken in the previous year.

Financial Performance Overview

TVS Supply Chain Solutions demonstrated strong operational scale-up across its two main segments: Integrated Supply Chain Solutions (ISCS) and Global Forwarding Solutions (GFS). Consolidated total income from operations grew by approximately 28.7% year-on-year. Standalone revenue also expanded, reaching ₹623.86 crore compared to ₹498.50 crore in Q1FY26.

Profitability metrics showed divergence between operating earnings and net profit due to non-recurring items in the prior year. Consolidated net profit after tax and exceptional items fell to ₹22.48 crore from ₹71.16 crore in Q1FY26. However, management clarified that Q1FY26 included an InvIT gain from TVS ILP. Excluding this gain and other exceptional items, operational net profit was ₹8.8 crore in Q1FY26, meaning the current quarter’s ₹22.5 crore represents a 156% year-on-year growth in operational profitability. Standalone net profit after tax stood at ₹7.96 crore, up from ₹3.30 crore in the same quarter last year.

Segmental Performance and Business Highlights

The ISCS segment delivered strong year-on-year growth with revenue at ₹2,417 crore in Q1FY27 versus ₹1,983 crore in Q1FY26, displaying a growth of 21.9%. The segment’s adjusted EBITDA was ₹196.3 crore at an 8.1% margin, down slightly from 8.3% in the previous year due to initial implementation costs for new contracts. Management expects these margins to stabilize as new sites become fully operational.

The GFS segment clocked a revenue of ₹918 crore in Q1FY27 compared to ₹609 crore in Q1FY26, marking significant growth of 50.6%. This was largely led by growth in ocean freight volumes in India and upward movement in freight rates. The segment’s adjusted EBITDA improved to ₹38 crore at a 4.1% margin, up from ₹13 crore at 2.1% margin in Q1FY26. The margin improvement reflects volume growth, cost optimization initiatives, and better sourcing efficiencies.

New business wins reached an all-time high of ₹543 crore in the quarter, representing 21% of quarterly revenue. The order pipeline remains robust at over ₹7,500 crore. Wins included mandates from marquee customers in renewable energy, consumer beverages, automotive, and retail media sectors. The company also completed the acquisition of Swamy & Sons 3PL in Q1, with its performance included for 40 days in the quarter.

Strategic Developments and Outlook

TVS Supply Chain Solutions announced a joint venture with ALA Group to expand its footprint in defence and aerospace supply chain solutions. Management stated that the JV aims to reach ₹2,000 crore in revenue by year five of operations, leveraging ALA’s existing contracts with major aerospace manufacturers like Boeing and Airbus. Initial revenue from this venture is expected to commence in the second half of FY27.

The company continues to invest in technology, having implemented Oracle ERP for its India ISCS business and integrating AI and robotics in warehouse operations. Management identified recession risks and geopolitical tensions as primary concerns but noted that close customer relationships provide visibility into demand shifts. The company maintains an aspiration for mid-teen revenue growth in FY27 and aims to achieve a 4% PBT margin trajectory, targeting 9.5% to 10% ISCS EBITDA margins by Q4FY27.

What the Numbers Show

The data reveals a clear bifurcation between reported net profit and operational performance. While consolidated net profit fell 68% to ₹22.48 crore, this decline is entirely attributable to the absence of the one-time InvIT gain recorded in Q1FY26. Excluding this exceptional item, operational net profit nearly tripled to ₹22.5 crore from ₹8.8 crore. This underscores that the core business is generating significantly higher cash flows and operating leverage than the headline net profit suggests. The simultaneous expansion in adjusted EBITDA margins (to 7%) and PBT growth (70.7%) confirms that the revenue growth is translating into sustainable profitability, despite temporary margin compression in the ISCS segment due to new contract onboarding costs.