Ladies and gentlemen, we welcome you all to the Q1FY25 Audience Conference Call of TVS Supply Chain Solutions Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements do not guarantee the future performance of the company and may involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand over the conference to Mr. Jaisankar K, Head Investor Relations for TVS Supply Chain Solutions. Thank you, and over to you, sir. Thank you, Operator. Good afternoon and welcome all to the TVS Supply Chain Earnings Call of Q1FY25. We have with us today Mr. Ravi Viswanathan, our Managing Director, and Mr. Ravi Prakash, Global CFO. Our financial results and the investor presentation have been already hosted in the company website and also reported to the stock exchange. We'll commence the call now with the opening remarks from our management team, followed by the open forum for question and answer. Before we begin the customary remark, I would like to point out that some of the statements made during today's call may be forward-looking in nature and must be reviewed in conjunction with the risks that that will be associated. A disclaimer to this effect has been included in the earning kit that has been shared. I now request and hand it over to Mr. Ravi Viswanathan, Managing Director of the company, to make the opening remarks. Yeah, hi, thank you, Jaisankar, and good evening to all of you. I would firstly like to welcome all of you once again to our earnings call to discuss the performance of the first quarter of this fiscal year, 2024-2025. I'll share with you the highlights of our performance, and my colleague, Ravi Prakash, will then take you through the analysis of our numbers. We look forward to interacting with you as part of the question and answer session. Before I begin, it's customary that I provide a brief background to our company to the benefit of those participants who might be joining our analyst calls for the first time. TVS Supply Chain Solutions is a tech-led and asset-light supply chain solutions provider with capabilities across the value chain. Integrated Supply Chain Solutions or ISCS segment and Network Solutions or NS segment are the two business segments of the company. Our presence spans four continents: Asia, Europe, North America, and Oceania, with a diversified customer base spread across multiple sectors. We offer bespoke and tailor-made solutions to our customers, so our customer contracts are generally long-term, and our customer services are predominantly in the 3PL space that can evolve overseas markets. We also offer 4PL services. To summarize, TVS Supply Chain Solutions is a company with a strong Indian base and a global presence, offering best-in-class supply chain solutions across the globe. With this short introduction, I shall now move to the performance highlights for quarter one of fiscal year 2024-2025. At the outset, I would like to state that we continue the momentum of quarter-on-quarter profit-led growth in both ISCS and network revenue segments. The ISCS segment delivered quarter-on-quarter growth of 3.4% linearly and a growth of 8.1% on a year-on-year basis, and grew both in India and the rest of the world operations. The network solutions segment grew handsomely and delivered quarter-on-quarter revenue growth of 6.4% and 14.8% on a year-on-year basis. Business development continues to be robust across the segments and contributed 10.7% of total revenue. At a consolidated level, the company achieved a revenue growth of 10.9% on a year-on-year basis and 4.7% on a Q-on-Q basis. The company recorded a PBT of INR 13.7 crores, which reflects our resilience and quarter-on-quarter profit enhancement measures. With this brief background, let me hand it over to Ravi Prakash, our Global CFO, who will then take you through a detailed analysis of the numbers. Thank you, Ravi. Good afternoon, everybody, and thank you for joining the Q1FY 2025 earnings call. Let me walk you through the highlights of our financial performance for the quarter ended 30th June 2024. In the last earnings call, we had called out that the company had reached an important milestone on its revenue and margin journey by growing consolidated revenue and delivering positive PBT. This is with reference to the earnings call in Q4. This quarter's results provide further evidence that we're continuing on this journey and further building on the growth momentum. With that, let me walk you through an analysis of the key line items in the financials. Q1FY 2025 revenue was INR 2,539.4 crores, compared to INR 2,426.3 crores in the previous quarter and INR 2,288.9 crores in Q1FY 2024. This translates to a year-on-year growth of 10.9% and quarter-on-quarter growth of 4.7%. The drivers of this revenue performance: first, both our segments, Integrated Supply Chain Solutions and Network Solutions, have delivered strong growth. The ISCS segment grew 8.1%, and the network segment grew 14.8%. In the network segment, revenue growth was driven by healthy volume growth in the forwarding business. Revenues from business development maintained their momentum, with INR 246 crores being clocked in this quarter, which is about 10.7% of the base revenue. The pipeline of orders continues to be healthy. So these are the three components which kind of helped deliver the strong revenue performance. Other income for the quarter was INR 5.6 crores compared to INR 6.8 crores in the last quarter and INR 18.2 in Q1 of last year. Other income in the quarter was mostly interest from bank deposits and a little bit of forex gain. The total income for the quarter was INR 2,545 crores, which was a growth of 10.3% year-on-year and 4.6% sequentially. I now move to a brief explanation of how the major expense line items have evolved and have resulted in the margin performance. Material costs for Q1FY 2025 were INR 488.7 crores, which increased 17.3% on a year-on-year basis and 4.6% on a quarter-on-quarter basis. Incremental material cost is on account of change in business mix in the rest of the world operations, and this is due to the nature of the contracts that we have entered into in some of the geographies. The company can manage these fluctuations within its gross margin and offset any variations through it through operating leverage. Freight, clearing, forwarding, and handling expenses, being variable in nature, increased due to higher volume of freight handled in the GFS business and due to additional costs charged by ocean carriers on account of the Red Sea situation. This expense line was up for the quarter by 29.2% year-on-year and 15% on quarter-on-quarter basis due to the reasons that I have already described. Employee benefit expense for the quarter was INR 576.8 crores, up 4.9% year-on-year and 1.5% on quarter-on-quarter basis. The year-on-year increase in employee benefit expenses is on account of ramp-up in customer engagements in the ISCS segments, and these costs are absorbed in the gross margin of the respective contracts. In fact, the rest of the employee expense, which is mostly overhead in nature, came in pretty flat. With these numbers, the ISCS segment reported an adjusted EBITDA of 9.7%, which is pretty much in the range that we had already always talked about, between 9.5%-10%. Right? I would like to spend a little bit of time on the EBIT performance of this quarter. We've added about 30 basis points of EBIT margin versus the same period last year. This is a result of the increase in the absolute gross margin and the fixed cost leverage. It is in line with our midterm plan. EBIT improvement has been further supported by a drop in interest, and we have managed the gross debt very tightly. In fact, you'll notice that the gross debt is actually slightly lower than March numbers, and we have funded the entire revenue growth through internal cash accruals. As a result, PBT margins have improved 100 basis points versus the same period last year, leading to a INR 13.7 crores PBT. We expect to build on this momentum in the ensuing quarters. This concludes a quick summary of our financials. I'll now hand it back to Mr. Ravi Viswanathan. Thank you, Ravi Prakash, for the analysis. Let me touch upon business development and the key engagements. We've been able to grow revenue in both the ISCS and the NS segments for the quarter and also result in higher net profit for the quarter, demonstrating turnaround of the business. Our BD continues to contribute 10.7% of the revenue across both ISCS and NS segments, and for Q1, the BD contribution was INR246 crores. For those details, please refer to our investor presentations, pages 12 to 15. We had significant new customer wins in both the segments. In ISCS, we had a global IT service provider in India, a metal forging manufacturer in India, a passenger and commercial vehicle manufacturer in India, a water management utility services provider in the U.K., an industrial machinery manufacturer in Europe, and a passenger car manufacturer in the U.S. These are some of the customer wins that I wish to call out. Some of the new customer wins in the Network Solutions segment were a global electronic component manufacturer in the Asia-Pacific, a two-wheeler manufacturer in India, a furniture manufacturer in Asia-Pacific, a material handling equipment manufacturer in the U.K., and a system integrator or an IT services company in Europe. What is exciting for us is that our pipeline of new opportunities continues to be strong, and we are building on that strength quarter-on-quarter. There is currently present a revenue opportunity annualized in excess of INR 4,000 crores. On the subject, I would probably like to call out two key developments. Firstly, our contract in the U.K. with a leading energy major company, which we announced last year, where we offer best-in-class inventory optimization and final-mile delivery solutions at a very large scale and complexity. This unique solution offered has now opened the doors for previous SCS in Europe to participate in large deals in the U.K. region. What is worth mentioning is that the average deal size since we signed that contract has more than tripled to GBP 9 million from GBP 2.7 million before we engaged with this utility company. By the same token, a farm equipment manufacturer in the U.S., we have an engagement of a 4PL solution involving inventory and after-market warehouse solutions, again of large scale and complexity in the USA, and offered by TV SCS in North America. Thanks to the fulfillment of this prestigious contract, we are now seen actively engaged in similar-sized opportunities, which otherwise we were not invited to. Now, the average new opportunity size in the U.S. has more than doubled in the last 12 months, if I look at my pipeline. We are motivated by these wins, and given the large deals in the pipeline, we are confident on continuing the revenue growth and BD-driven revenue growth momentum. In terms of deliverance, the engagements we have delivered are significant in the last quarter. I would add the following: we announced a five-year strategic supply chain contract with a global auto major, which amongst key deliverables includes handling 3,000 SKUs and 65,000 order lines. This signifies the trust placed upon the company to handle critical supply chains for the global auto major company. We achieved a milestone of handling 500,000 completely knocked-down kits for a domestic auto major company for its EOU plant through our offer of world-class subassembly and fitting services, which are unique and state-of-the-art solutions. We had earlier mentioned about global account management. As we move forward, we are present across 4 continents and a bouquet of service offerings to marquee customers that we have. We are uniquely placed to grow the widespread captive customer base. The company is embarked on a global account management program for about 10 customers with 3 key objectives, namely cross-sell more of its capability, cross-sell across geographies, and tap the economies of scale. Today, we have over 60 active proposals across these global accounts, which we are pursuing. All of this comes because of a growth enabler, which is the IT platform, the IT system. IT is a backbone to the supply chain service offering of the company, and IT-based applications provide the impetus for reaching new customers and enhancing the wallet share with our existing customers. During the quarter that just concluded, we implemented several key tech initiatives across our businesses, and what we would like to call out is predominantly in the area where we are deploying AI at scale. We have an Alpha platform in India which uses AI to validate proof of delivery, and this is in the India transportation platform. We implemented a Vision Inspection using AI/ML in the subassembly processes, allowing for real-time quality checks for one of our large customers in ISCS North America. An AI-based polarized light damage detection deployed for our beverage clients in Europe. Finally, working closely with academia, we have a partnership with a leading U.K.-based university focusing on AI governance and how to implement it as a core structure throughout our businesses globally. In summary, in Q1FY25, we continued with our revenue growth, and we had revenue growth across both our segments, and we are back to a quarter-on-quarter profit-led growth. With that, let me open the floor for questions. Thank you. Thank you very much. We will now begin the question-and-answer session. Participants present on the audio bridge who wish to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sanjay Shah from KSA Shares & Securities. Please go ahead. Yeah. Good afternoon, gentlemen. So thanks for the opportunity. First of all, congratulations on good numbers and nice presentation with explanations, sir. I appreciate the way you explained and made us understand the company. The question which was coming to my mind was regarding the growth and the complexity of the solutions what we provide, and the third-party logistics that is 3PL, which is growing at a very rampant speed worldwide and in India. Can you highlight upon it how we stand? Because we are now growing global. So how do you see the difference between what you do, the customer in India as well as outside India? Is there any change in their requirement and what we offer to them, and what is our future offerings to them? Thank you so much for the question. Thank you for your wishes on our part. Yeah. Let me answer by saying we are operating across two distinct regions, India and the rest of the world. What we are seeing in the rest of the world is, I would say, large-scale outsourcing, which means that organizations are outsourcing a bulk of their 3PL and 4PL activities. And our solutioning, combined with our ability to bring in a lot of technology into our solutions, is the key differentiator as we deploy large-scale outsource operations for our customers. So the example I gave, whether it is the beverage industry or the farm equipment or the commercial vehicle that we spoke about or the utility company, they're all mega projects, if you want to call it, which is basically transformational in nature. We are taking over the supply chain operations, transforming it both from a process and a technology perspective and bringing in higher levels of efficiency. They are typically 5, 7, 9, 10-year contracts, which clearly outlines how the transformation will lay out. We had mentioned it earlier in our earnings call that India is an evolving outsourcing market. We obviously need to work very hard in ensuring that we propagate all our success stories and our capabilities and ensure that we are participating as the outsourcing market opens up. In India, it's still a 3PL and maybe more value-added services like contracts and not supply chain outsourcing per se. The key common thread in both of this is the use of technology. In both India and the rest of the world, we focus on putting technology to play and bringing in high level of automation in the processes that we are deploying across the globe. But we have different platforms, one for India and one for the different parts of the globe. I don't know if I answered that question sufficiently, but I'm happy to take more questions as we go along. Yeah, yeah. So it's really helpful. My second question was just to understand our ISCS and Network Solutions, what we cater to and offer solutions to our customers. How we actually do that? I'm sure it is a basic question, but it would be helpful to us to understand how it is managed globally. We use the outsourced third-party to support our solutions, or we have our in-house solutions for everything? So most of the time, the solutioning is done by us, by our company, of course. But we do engage with a lot of third-party providers of maybe services like warehousing or transportation. But the bringing together of all of the pieces and stringing it together with technology is where the differentiation comes and where the efficiency is built. So, for example, I said we are an asset-like company, so we don't own any transportation fleet, nor do we have an extensive network of our own warehouses. So we will lease these facilities from third-party providers and bring it into our solution when we go into our customer engagements. That makes sense, sir. Thank you very much. I'll come back in queue for more questions. Thank you, sir. Thank you. The next question is from the line of Vishal Periwal from Ashika Institutional Equities. Please go ahead. Hi, team. So first, I wanted to understand there has been a big growth in the ISCS segment in the India region. So could you give some idea on this thing? The India segment has performed exceptionally well in both India and the rest of the world, but the ISCS segment is a 6% decline. So could you give some flavor on this thing? Yeah. Let me first take it, and then Ravi Prakash can add to it. As you have seen from the data, Q1 has been relatively soft in India, probably because of the elections. But what we did see was a higher push towards exports, and that explains why we had a higher MS business as compared to the ISCS business. But from an ISCS perspective, we have quite a few deals out there in the pipeline looking very healthy. I would call it a quarter phenomenon rather than anything which is trending. Ravi, you want to add something? Yeah. Vishal, I kind of build on what Ravi Viswanathan already said. I look at this more as a timing thing. If you go back to what we had put out in the Q4 earnings, we had given three-year figures, and you'll find that across three years, all three businesses, Europe, North America, and India, were growing at about 17%-18%. So over a couple of quarters, these things normalize. Sometimes, because of the timing of deals, or like Ravi talked about, or the elections, or a couple of things, one or two quarters might be up or down, but over a four to six-quarter period, these things normalize. All right. So for the SI ending, I mean, what would be your outlook for the MS segment? For the MS segment? Look, the MS segment, in terms of the revenue that you've seen in this quarter, that's probably a good number to start with because we kind of see that run rate continuing. The only change, and that maybe we can look at it towards the end of the calendar year, is the Red Sea right now, prices are a little bit elevated. There is an impact of approximately INR 30 crore-INR 40 crore on the revenue in this quarter because of the Red Sea situation. That maybe in the next couple of quarters, we'll have to reevaluate. Other than that, the underlying trends, I would expect them to continue. Okay. Thank you. That explains my first question. Secondly, in the annual report, if I see your total number of customers has been kind of declining, like it was 10,531 in FY 2022, but 6,909 in FY 2024. So do you give some sense on it? Yeah. So Vishal, actually, I'd like to break it up. So we have two kinds of customers. About 2,000-3,000 customers are what I call the core customers who've been there for a very long time. But in the freight forwarding business, we have a long tail of customers, and many of them came on board during the COVID period. And they are more tactical in nature. They might do a couple of shipments, and they might fall off. So that's the reason you'll find that the number of customers has declined. But on the other hand, if you look at the business development, every year, we've been doing the same number, INR 1,200-1,300 crores, and the revenue has grown. In terms of real revenue, what we call big revenue contributors, we are doing well, and the number of Fortune 500 customers is actually going up year-on-year. Okay. Yeah. Sure. Thank you. I mean, that explains for now. Thanks, Vishal. Thank you. The next question is from the line of Anshul Agrawal from Emkay. Please go ahead. Hi. Thank you for the opportunity. So could you throw some light on the difference between the Indian supply chain market versus other developed markets? I understand we are far behind in terms of evolution, but in terms of margins, competitive intensity, or efficiency, productivity levers that we would have in the Indian markets versus the developed markets? Okay. So I think I actually addressed that first question, Anshul, in the first question. But the Western hemisphere is predominantly, I would say, driven by large outsourcing opportunities. So typically, you would go and pitch for moving the entire sourcing and procurement of a certain organization or managing the entire operations of a certain industrial customer or managing the entire aftermarket for an auto provider or the like. So they are typically larger deals, outsourcing positions, outsourcing opportunities, and they're also typically multi-year deals with built-in efficiencies year on year. So if you look at it from an it perspective, it is multi-year, every year, efficiency is being baked in so that by the end of the outsourcing period, the company has had a significant cost takeout, and efficiency built in into their supply chain operations. In India, it's more evolving. And secondly, let me also say that it is highly system-driven, meaning IT, and it's easy for us to price the IT in those kind of outsourcing deals or bake it in as part of the pricing in a very transparent manner. In India, I would say it's still evolving. I don't think we are seeing the likes of such outsourced deals. We probably saw 1 or 2 early in 2021, but since then, we have not seen very large-scale outsourcing deals. So where we see our sweet spot is in taking parts of operations which we believe are inefficient in a customer organization and go and build a tailor-made or a bespoke solution using technology components and building in that efficiency. So from a pricing perspective, it is aggressive, more competitive. From a competitive perspective, I would say the market is probably as competitive outside as it is here. On the ISCS side, the margin profile would be not very different. It would be similar, but maybe Ravi Prakash can throw some light on those differences. But largely, I would say systems, processes, outsourcing, and the maturity of outsourcing is high in the Western market. It's more evolving here in the India market. Ravi, you want to add something? So, let me build, Anshu, with a little bit of specific numbers, which maybe that probably might help you. Yeah, very useful. See, if you take a typical Indian supply chain contract, three years is probably a good number. The customer relationship itself might exist for 10, 15 years, but normally, you'd probably look at a three-year contract. In the U.K., a five to seven-year contract is quite normal. In the U.S. as well, you can actually look forward to five, seven. There are contracts in the U.K. which can go up to 10. So in general, the average length of the contract, and I would refer you back to our Q4 earnings presentation, where we give you the average length of the contract for various geographies, you'll find it's the longest in Europe, and then North America. So that's this. In terms of recruitment phase, typically, in an Indian contract, you're working for about maybe six months before you start up from the time you know of an opportunity to actually starting to recognize revenue. And this is not; I'm not doing exact math, but anecdotally, I would say about six months would be the leader. In the U.K., it would typically be around a year at least if you're talking about large contracts which are about five to seven years old. Now, how does it help in the margin profile? I'll go back to what Mr. Ravi Viswanathan said. Systems, processes, and that means SLAs and in terms of deliverables are very, very tightly and in a great level of detail defined in the overseas market. The plus of that is you can plan your operations very well. So the degree of predictability is very high. And if you execute the plan, the predictability of margins is very high. The margin absolute% itself may not be very different, but the predictability of margin is very high outside of India as long as you are meeting your deliverables. Right? So the ISCS business itself, from an Indian perspective, as a portfolio, we don't look for a country versus another country because most countries are actually moving in a similar region. Except that the moment you have a much longer contract, you have a better chance to plan, and you have a good period of ramp-up, and you have a longer period of burnout. I hope that kind of gives you a sense. Definitely, this was useful. A follow-up question on this. Since contracts in India are slightly shorter or way shorter than probably a U.S. or Europe, scalability in India would also be a challenge because from what I understand, in this market, you need to demonstrate because these are all customized contracts, right? You need to understand the customer's business processes, then demonstrate how you'll add value, and then probably you'll get that contract. Please correct me if I'm wrong. I think what you're saying is right, but scalability is not a challenge. Correct. What you're saying is absolutely right. We have to prove the concept. We probably would run a quick pilot to ensure that the systems and processes that we're talking about are proving the solution. But scalability per se, we can do a fair amount of lift and drop of processes and systems across engagements. So that's probably something which we are focusing on. Just to build on that, see, look, there's one thing which is very similar between India and the rest of the world. Contract, to me, is only a definition of a project. The relationship, actually, in both cases, is at least 10-11 years. In both countries, both India and the rest of the world, a customer might, in India, renew the contract every 3 years, and the customer in the U.K. might renew it once in 5 or 7 years. But if you look, our 20-year experience has been that the length of the customer relationship continues. So going back to your scalability questions, when we go into a customer, our intention is that we are going in with, "Hey, listen, we are here to make a long-term difference to the customer's supply chain." That's how we operate. And therefore, we can actually deliver value. Great. Very entertaining. Just one last question on this again. So can I say operating leverage only kicks in by farming an account? No. Let me clarify operating leverage. There are two parts to the operating leverage. See, there's a contract-level leverage, and then there is a company-level leverage. And when you're talking about a contract-level leverage, at a contract, let's assume you're trying to take a contract at a gross margin of X. That leverage moves in a pretty narrow band, 50-100 basis points. If you have a contract which is there for X, it is never going to become 2X, nor is it going to become 0.5X because there, at a contract level, it is a pretty narrow band, and a contract is a unit of measure. What we are banking on is actually not contract-level operating leverage. We are banking on company-level operating leverage. What do I mean by that? If today we have, I'm just making up, a few thousand contracts in the company, all these contracts are supported by a sales team, a solutions team, finance, HR, management. That total cost of the company is approximately 10.5%-11% of the company of the revenue. If I take a global benchmark, that number can come down to anywhere between 8-9. So there's about 200 to 250 basis of leverage available. What we are banking on is if we can, as a portfolio keeper, gross margin% in a narrow band, every incremental contract at the EBITDA level and, more importantly, at the EBIT level contributes higher than the existing business. And that is what I call company-level leverage, which is what we've been giving you. I'll refer you back to our Q4 earnings presentation. What we call as operating leverage, that's what we refer to for long-term margin growth. Great. This is very useful. Thank you, gentlemen. Thank you so much. To ask a question, please press star and one down. The next question is from the line of Saumil Shah from Paras Investments. Please go ahead. Hi, sir. Congrats on a good set of numbers. In your presentation, you have a medium-term outlook of 4% PBT by FY 2027. So how confident are we to achieve that? And can you also guide us on your revenue front by FY 2027? What revenue growth can we look at? Okay. Let me answer that question. So Saumil, thank you first for your compliments. I think let's look at it as two parts. The revenue growth is driven, like I said, across what I would call three fundamental drivers. One is what I would call as large contracts today that we are participating in, which otherwise we were not participating in. So I told you that the average deal size in the U.K. has tripled. The average deal size in the U.S. has more than doubled. And what it basically means is that today we are into more of the multi-million, multi-year contracts than we ever were before. And that is coming because we have a very, very strong now track record and also the ability to now win and deliver large-sized projects. So first and foremost, that is going to be a significant inflection point in terms of our revenue numbers. Our revenue should exponentiate going forward, given that we are participating in quite a few large deals and winning just one, two, or maybe three of them could significantly alter that graph in our favor. The second is we are today working with a lot of Fortune 500 customers, and one of the things that we've done is to spawn off a global account management program where we're paying for an account can, I mean, not can. We do now have one account manager who's looking at the opportunity landscape, not just within one region, which is how it used to be in the past, but the entire account and globally. And therefore, creating more opportunities both away from the home geography and also in multiple capabilities that we operate in. That has increased the throughput of opportunities and therefore an expansion of the pipelines and the potential for us to convert them into revenue in the short to medium term. So again, another driver which gets our revenue in. The third, I would say, is a huge differentiator. I spoke about AI that we're deploying at scale. We have always showcased our technology, and today we are showing more and more of that. Today, in three main geographies, that is the U.S., in Europe, and in India, we are showcasing AI at scale. We have an early AI program now in Asia-Pacific too. So the entire operations of ours, we will have showcased AI programs at scale and how we are bringing that to bear when it comes to our solutioning and therefore differentiating ourselves in the market. Our engagement with one of the leading universities in the U.K. is only going to further that or accelerate that whole program. So three main components: very large deals, global accounts, and thirdly, the way we are leveraging technology in our solution. All of that puts us on a path to exponentiate our revenue growth. And of course, with that revenue growth comes opportunity for us to scale our EBITDA and PBT numbers. And Ravi, you want to touch upon any of the margin-related, the 4% margin that Saumil has spoken about? Saumil, to me, 4% is a, I mean, in the company, we think about it as if you're about three years away, 12 quarters away. So every quarter, and that's what we've been saying from our first earnings call, every quarter has to be better than the previous quarter. So in four quarters, what can we demonstrate? The PBT margin in Q1 FY 2025 is 100 basis points better than what it was in Q1 FY 2024. And sequentially, it has been better for the last three quarters. That is what we are focused on. It goes back to my comment about company leverage. The three levers are very simple. Have a strong pipeline which leads to a double-digit revenue growth, step one. Manage your gross margin in a very tight band, step two. Keep your overhead growing at a lower rate lower than the revenue, step three. Naturally, the incremental gross margin, most of it falls down to the bottom line, and therefore, at the company-level leverage, improves your PBT margin. And we are managing our debt again in a very tight manner. So that's how we plan to build it. And at the moment, we believe we are on that track. Okay. Okay. That was very insightful. Thanks for the detailed explanation. So at least, I mean, in terms of revenue, we can see a double-digit growth year-on-year. I didn't want to fall short of giving you a guidance, but the organization's focus is definitely towards converting all of these large deals and hopefully also get significant mileage out of the global accounts that we have identified. So yeah. Okay. Okay. Sir, what is your gross net position as of today? INR 725 crores. All of it is only working capital. It used to be INR 795 crores in the Q4. And before the IPO, it was INR 1,700 crores. So we came down from INR 1,700 crores to INR 795 crores to INR 775 crores. I think what we have done is the incremental revenue, the working capital required for that, we are funding internally. So we are keeping the debt in a very narrow band. Okay. But sir, I'm unable to understand. Every quarter, I think this quarter, we have paid about INR 40 crore interest. So yearly, it comes to around INR 160 crore. And the debt is around INR 800 crores. So I'm not able to understand. Why so much? Let me clarify that. The interest portion, because the interest number includes the in-day interest. If you actually split it out, the bank interest is actually INR 17 crores. So on 775, it is INR 17 crores per quarter. Right now, we are at about INR 17.2 crores per quarter. The remaining amount? That's the Ind AS, the Ind AS interest. The lease rental interest. That's not actually that's just an accounting thing. Okay. Okay. So same way with the depreciation part also? Same thing. Same thing with the depreciation. The Ind AS depreciation is different from the actual depreciation. What would be the actual depreciation? Could you guide us? I think given that in the balance sheet in Q4, you can look it up. Or later, maybe follow up with our IRT. We'll give you the numbers. Maybe we give another chance to the because there is a long discussion here, if you don't mind. Let's give the others a chance. No issues. That's it from my side. Thank you and all the best. Thank you so much. Thank you so much. The next question is from the line of Bharat Sheth from Quest Investment. Please go ahead. Hi. Congratulations, team, and good to talk with Bar. Hello. Yes, yes. We can hear you, Bharat. So, sir, my question is related. Now, when we are talking of large deals, in some of the deals where we have to buy the material on our account on behalf of the customer, like particularly servicing the ATM and all, such kind of a deal. So now, when we are talking of such a deal, so new deal which we want, does it include that also? And on account of that, how much additional working capital we may need to require? So let me answer that, Bharat. In general, we don't take inventory on our books. For example, the large U.K. utility company deal, there is no inventory involved. In general, we prefer to take a pure service contract where we are only paying for people and maybe some of the equipment and technology that we put in place. That is the general policy of the company. Having said that, there are a few deals, and I underline the word few, where large customers would like you to make their process simpler by inventory on their behalf and just not buy. They would like you to store it, in many cases, do some kind of value addition to it in terms of assembly or whatever it is, and deploy it. So whenever we take a deal which involves some inventory purchase, we don't take a standalone inventory purchase deal. Typically, it is combined with other services that we offer. It could be right. And those deals are not we are very careful about the number of deals we take. And those deals are always backed by very strong working capital practices from the customer. For example, we do these deals in U.K. and U.S. In most cases, we have very good, very favorable payment terms. So the working capital that we deploy on that does not actually place a burden on the company. Therefore, in fact, if you look at it, our material cost this quarter has gone up significantly because of one of those contracts in the U.S. But you will see that my debt has not gone up. The gross debt has not gone up. In fact, it's turned up. Okay. Because we're able to manage the working capital quite well. Okay. So my question then, second question is now, when we purchase inventory and keep it on behalf of the customer, so in case of movement of the, I mean, prices of those inventory, who I mean, bear the risk? We don't take any of the risk at all. We don't take any risk of total quantity or price of inventory. That is 100% with the customer. We never speculate on price or quantity. The inventory is always procured based on a fixed or a forecast by the customer. Typically, we always have an understanding in terms of the utilization of the inventory. In fact, if you look at our financials over the last 5, 6 years, you would never see anywhere where there has been a risk either on price or on inventory items. Okay. Okay. Fair enough. And going ahead, it will not affect any way either, I mean, our profitability or working capital requirement. Is that fair understanding? Yeah. See, look, as a profitability guy, you think of these contracts as part of the overall mix. There are some contracts which come here, and we tend to look at the advantages of doing these contracts because if you are doing inventory for a customer, the customer is double stickier with you. We do it selectively for very good customers, and we kind of do it. And like I said, we are quite confident that we can manage the gross margin% at the overall portfolio level well. So just let me add to that, Bharat. So today, one of our largest customers in the U.S., we started the relationship with an engagement which was probably more to do with the kind of work that you mentioned. And we were billing maybe about $5-$6 million a year to the customer. Today, we have expanded the scope of services with that customer where we probably are billing the same amount on a monthly basis. So many times, it is to our tactical advantage, like Ravi Prakash said, getting into the engagement creates stickiness with the customer. We also have a very strong understanding of what happens to those inventory items and therefore ability for us to go back with proactive proposals where we can value-add and create more opportunities for us to engage in. This is a classic example in the U.S. where we started predominantly with this kind of an engagement, but today we are a services player billing almost $5 million-$6 million a month. Okay. And second question, last year, we rationalized some of our warehousing. So currently now, where do we stand, I mean, in that process of rationalization of warehouses? So look, this thing is about us looking at our warehousing space and network is a continuous process. Every time as we look at our deals, as we see the business footprint, we keep evaluating our warehousing space. We keep evaluating the network, and we keep adjusting it accordingly depending upon what we know of existing customers and what new contracts are going on. So I look at this more as an ongoing process. It's not a one-time thing. Are we seeing, I mean, more, I mean, occupancy in our warehouses in India? So in our case, we typically don't take warehouses on "a speculative basis." All our warehouses are backed by a customer contract. So it's not that first we do a warehouse and then look for customers. It's typically we win a contract and then get a warehouse. So most of our warehouse probably will be operating at upwards of 85% capacity. Okay. And international also is the same way? Yeah. The model is similar. Model is similar. Okay. Thank you. And all the best, sir. Thank you. Thank you very much. The next question is from the line of Vaibhav Shah from JM Financial. Please go ahead. Thanks, Ajay, for the opportunity. I had a few questions. Firstly, you indicated that the margin in the ISCS business could be in the range of 9.5%-10% going forward as well. But if you look at your last year, in the first nine months, the margin was around 10.2%, within 10%-10.5% range. So why has the margin come up? And are these levels sustainable, or there is a further possibility of a reduction, or we can go back to that 10.5% levels as well? So Vaibhav, actually, if you go back last year, right, and we had said that in the earnings call earlier as well, there was about one-time income on consultancy that we had in one of those quarters which took the margin to 10.4%. In fact, as we went into the IPO, we had set 10% as a "aspirational goal" for the segment. And we've always been saying that we seem to have gotten there much faster. And that's why we've kind of given a range of 9.5%-10.5%, 9.5%-10%. So at the moment, we are quite comfortable in the range of 9.5%-10%. And that's what we should see coming in the next couple of quarters as well. Okay. So secondly, if you look at the growth in this quarter, both in terms of revenue for ISCS and NS, so that revenue growth should be similar for the rest of the year as well on a YOY basis? Let me put it differently, Vaibhav. If you look at the ISCS's revenue, you can see sequentially for the last four, five, six quarters, we've been adding about 3%-4% every quarter, right? If you go back to our guidance, it's very simple. The business development is running at about INR 250 crores-INR 260 crores. You have the base revenue of ISCS's. That can give you a pretty good sense of where we are. Revenue is predictable. And from going forward, if anything, this quarter's revenue should replicate and might probably move up a little bit. That's where we are. On the NS, I always said that this quarter we had this one-time, how should I say, I wouldn't call it a benefit, an elevation because of the Red Sea surcharge, which is roughly equal to INR 40 crores this quarter. Now, I don't know how long this will continue, but at least for the next couple of quarters, that is something that is probably "extraordinary." Other than that, the rates, if you adjust for that, in the freight forwarding section, the segment are pretty much back to normal levels. So even NS revenue for that INR 40 crores, if you take that out, we are more or less on a decent run rate. So that should give you a sense of where the year should end. Okay. And sir, lastly, on the debt side, how do we expect it to come off in the next by March 25? I wouldn't expect it to come off. This is probably I would expect it to move in a narrow band, Vaibhav. It should be in similar range, roughly around 770 or so? It would definitely—I mean, I don't expect it INR 775 to go to INR 500, for example. INR 775+ up maybe INR 800, maybe INR 750. That's more a quarterly way we do the see, look, a significant portion of that is actually going into as revenue grows, some of it is going into investment. So we'll try and make it move in a narrow—we'll try and make it move in a narrow band. That's what I would say. Okay. Okay. Thank you, sir. Those are my questions. Thank you so much. The next question is from the line of Disha Firodia, Ashika Institutional Equities. Please go ahead. Hi, Team. Thank you for the opportunity of the follow-up question. You briefly mentioned you added the Red Sea surcharge of around INR 40 crore. Can you just elaborate on the same? What's happening, Disha, is because of the Red Sea situation, ships are having to go down the Cape of Good Hope all the way around South Africa to go to Europe when they move from Asia to Europe, right? That is actually creating incremental costs for the lines, which they're passing it on to customers and freight forwarders and customers as a surcharge. Let's say if a container normally used to cost, say, $1,000. Now you have to add the incremental cost of this round trip around the African continent to the cost. That's the Red Sea surcharge. Basically, the carriers are incurring more costs, and we don't get a% of that increase. So we see a revenue increase, but not a margin impact. Therefore, margin% actually drops a little bit because of that surcharge. Does that explain, Disha? Yes. So I mean, going forward also, would that entire margin% be around the same range as it was in the first quarter? I think as long as you have the Red Sea situation, at least for the next couple of quarters, I think that's where we'll probably see this. Okay. Thank you. That answers my question. Thank you. The last question is from the line of Bharat Sheth from Quest Investment. Please go ahead. Thanks for the opportunity again. I mean, so I just want a small question on global freight forwarding, which are the major routes we are operating? If we can give some color, say, like Europe is contributing how much and other region contribution by% of total? No, I don't think we are disclosing that as yet. But hopefully, we will get to that level maybe a bit later. So we basically operate around 14 lanes across the globe, 8 sea lanes and about 6 air lanes. So China, Australia is an important lane. India to Europe, India to the U.S. is a big lane. Similarly, China-Europe is a big lane. Air lanes-wise, Germany, Singapore, Germany, Australia, Singapore, Australia, they're all significantly large lanes. So broadly, 14 lanes, 8 ocean lanes, and 6 air lanes. Yeah. Okay. Okay. Thanks, sir. And all the best. Thank you very much. Thank you. Ladies and gentlemen, I would now hand the conference over to the management for the closing comments. All right. Thank you so much. It was a very engaging session. I hope all of you had a good view into the company and also the performance of the company and the outlook as we go forward. I would like to thank all of the participants for being part of the discussion on the business performance and the outlook. It was a pleasure interacting with you, and look forward to seeing and speaking with all of you in a few months' time. Thank you. Thank you. Thanks again. Thank you. Thank you all. Bye-bye. On behalf of TVS Supply Chain Solutions Limited, that concludes this conference. 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