TVS Electronics Ltd, one of the top electronics companies in India, is witnessing strong demand momentum from the BFSI, manufacturing and logistics sectors, while its Electronics Manufacturing Services (EMS) business is gaining traction with new customer additions and rising utilisation levels, senior company executives said during the earnings call.
TVS Electronics Chief Financial Officer A.K. Velu said the company continues to see healthy demand for its products business, particularly from banking, financial services and insurance (BFSI), warehouse and logistics customers.
“For our Customer Support Services business, IT products, auto and power electronics segments are driving growth,” Velu said.
Manufacturing, logistics demand driving product growth
The company said handheld devices and 2D scanners used in manufacturing and logistics operations are witnessing robust demand as India’s manufacturing ecosystem expands.
“It is mainly the handheld devices and 2D scanners used in manufacturing and logistics sectors. As manufacturing grows in India, there is a resultant growth in logistics as well, and we are seeing good demand growth in this segment,” Velu said.
TVS Electronics added that the trend is creating fresh opportunities for its Products and Solutions Group (PSG), particularly in automation-led industrial applications.
EMS business expands customer base
The company’s EMS business at its Tumakuru facility is also scaling up operations, with the newly commissioned Surface Mount Technology (SMT) lines currently operating at 30% to 40% utilization.
Velu said the company has already onboarded a few customers and continues to add more as part of its business development efforts.
“We expect utilisation levels to improve further during FY27,” he said.
Revenue contribution from external EMS customers has already commenced, with the company working on prototype orders from several new clients that are expected to fructify during FY27.
TVS Electronics said its EMS focus areas include automotive electronics, industrial electronics, power electronics and defence systems.
Margin focus impacts revenue growth
The company said its focus on sustainable and profitable growth led it to consciously avoid lower-margin business opportunities during FY26, which impacted topline growth but improved margins.
“We had to let go of a few customer orders with lower margins. However, you are seeing remarkable traction in margins because the management is focused on improving profitability on a sustainable basis,” Velu said.
The Products and Solutions Group recorded muted growth during FY26 despite the company’s leadership position in Touch POS systems and thermal printers.
According to management, supply chain disruptions and rising memory prices delayed customer decision-making and order execution during the year.
“Even though we had customer orders in hand, customers postponed their acquisition plans because of price increases. Those opportunities may fructify this year,” Velu added.
Working capital pressures increase debt
TVS Electronics also witnessed an increase in short-term debt during the year due to supply chain challenges, higher inventory requirements and slower receivable cycles.
The company said rising memory prices forced it to maintain higher inventory levels, while customer payment cycles lengthened compared to previous periods.
However, improved payment terms from suppliers helped partially offset working capital pressures.
TVS Aikya platform gains early customers
On the digital solutions front, the company said its recently launched TVS Aikya and TVS AIDC platforms have started gaining traction.
Velu said the company has already onboarded a couple of customers onto the platforms and is working with existing clients for wider adoption.
The company expects all three business segments, Products and Solutions, Customer Support Services and EMS, to contribute to growth in FY27 through new customer acquisition and deeper engagement with existing clients.