No indications of US market slowing due to tariff, says TVS SCS MD

The tally of our Fortune 500 customers increased from 78 to 91 in the last one year, Ravi Viswanathan said

TVS Supply Chain Solutions (TVS SCS), one of the largest integrated supply chain solution providers in India, is on a wait-and-watch mode after the US tariff announcement, as the North American market contributes a considerable share of its revenue. Managing Director Ravi Viswanathan speaks to Shine Jacob about the geopolitical crisis in West Asia, the company's US market strategy, and on alternative supply chains, in a virtual interaction with Shine Jacob.

 

Your revenue is almost touching ₹10,000 crore. What’s your outlook regarding revenue growth?

 

What is most exciting is the quality of customers we are adding. The tally of our Fortune 500 customers increased from 78 to 91 last year. In the Integrated Supply Chain Solutions (ISCS) segment, our revenue grew 4.9 per cent in Q4 of last financial year (FY25) compared to Q4 of FY24, while in network solutions it was up 3 per cent. We are positioned well going into FY26 and are focused on growth. We had a very good FY25 and closed it with a revenue of ₹9,996 crore, a year-on-year (Y-o-Y) growth of 8.6 per cent. We expect revenue to cross the ₹15,000-crore mark in this and next financial years. This financial year, we will be closer to the mid-teens (in growth). I think the important thing is changing the profitability. This year, we are looking to change the profitability profile of the company.

 

The North American market contributes a substantial share of your revenue. How will the US tariff impact your supply chain business?

 

North America is a growing market for us, which contributes around 10 per cent of our revenue. We have not got any indications of the market slowing down due to the tariff. Right now, we are not seeing any of our customers showing a red flag. We have been talking to them to understand the characteristics. Now, the moratorium (on tariff) for 90 days has helped, as most of them are going to fill up their supply chain inventories. As we speak, we are seeing growth in April and beyond. We are predominantly in the industrial automobile sector in the US. We are managing complex warehouses and supplying through the production lines, among others. We are seeing huge opportunities even with our existing customers in the region and are expanding our customer base as well. We expect the market to contribute around 12 per cent of our revenue in the next two years. What we are definitely seeing is a slower uptake of cars in the electric vehicle (EV) segment. The last four months have seen a sharp decline in EV sales in the US. It has not impacted us tremendously. 

 

How are you looking at diversification, as 70 per cent of your revenue is coming from overseas markets?

 

Supply chain itself is a highly intertwined business with global geopolitics. It is very difficult to remove one part of the chain. When it comes to tariffs and countries that are negotiating them on a bilateral basis, it is inevitable, and hence stakeholders are doing the deals quickly. We will be working very closely with our partners to look at alternative supply chains and develop them. From an opportunity perspective, ensuring our customers that we are going to be part of this journey is very critical. More than the ISCS segment, my concern is on the freight side or the global forwarding business, which involves arranging and coordinating the international movement of goods. There is going to be uneven distribution in terms of shipments from certain countries. Already, there is huge traffic in the China-US region, as everybody wants to capitalise on the 90-day moratorium. That is causing supply chain imbalances like container shortages, capacity shortages, and over-requirement in certain regions. Freight rates have remained constant on the lower side for the last 18 months. We now see a possible spurt in freight rates.

 

During the last quarter of FY25, TVS Motor bought an additional 1.5 per cent in your company, increasing the overall stake to around 4 per cent from 2.4 per cent. What is the share of TVS Motor in your overall revenue and what does this stake increase mean to your business?

 

Overall, the automobile sector's share is less than 25 per cent, and an equal number goes to non-auto, but manufacturing. The entire TVS family, including our TVS Mobility Group, contributes to less than 10 per cent of our overall revenue. As far as the increase in shares is concerned, that is a treasury function for TVS Motor. Hence, the questions should be asked to that group.

 

How are you looking at the global volatility affecting the segment — especially the geopolitical situation in West Asia, and the rise in insurance rates, among others?

 

The current situation is very volatile. We are seeing price fluctuations regularly. We are seeing container shortages, and capacity constraints are expected too. A lot of that is policy-driven. We expect some amount of normalisation for these 90 days. However, for this quarter, it has to be closely watched. From our side, we are taking a lot of measures to manage our costs better to reduce the impact of the current volatile situation.