Analyst Concall
TVS Motor sees FY25 local demand momentum continuing in FY26
This story was originally published at 19:36 IST on 28 January 2025
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--TVS Motor: Expect e-bike industry to bounce back in Europe after 2 years
--CONTEXT: Comments by TVS Motor management in post-earnings analyst call
--TVS Motor:Seeing motorcycle demand from rural areas this yr after long time
--TVS Motor: Economy segment motorcycles, mopeds still facing pressure
--TVS Motor: Oct-Dec electric vehicle sales INR 8 bln
--TVS Motor: See FY25 domestic demand momentum continue in FY26
--TVS Motor: Oct-Dec capex INR 3.40 bln; see FY25 capex at INR 13 bln
--TVS Motor: Will keep launching new Norton products in coming years
MUMBAI – TVS Motor Co. Ltd. sees the demand momentum from 2024-25 (Apr-Mar) to continue in FY26, the company's management said in a post-earnings call with analysts on Tuesday. The company has seen demand for motorcycles from the rural segment for the first time in many years. However, the economy motorcycle segment and mopeds are still facing pressure as the buying power is still facing some challenges, TVS Motor's management said.
The company's capital expenditure was INR 3.40 billion for the December quarter, and pegged its capital expenditure for FY25 at INR 13 billion. For Apr-Dec, the company made investments of around 14 billion, mainly for product development of Norton products and product development activities of e-cycles. For FY25, the total investments are expected to touch INR 17 billion. The management stressed the importance of these products, whose benefits will be seen in the coming years.
The partnership between the company and Hyundai Ltd. will focus on micromobility, it said, adding that the timeline of investments will be given later. The partnership is for the development of advanced electric three-wheelers and micro-four wheelers in India, the management said.
Motorcycles of the Norton brand will be launched between FY26 and FY28. The company, which will launch a range of products, has high expectations from this brand. The company said it needs to look at sustained investments behind the product development to produce a good range of motorcycles by Norton and for them to be available in every part of the world.
The management expects the electric bike segment to bounce back in Europe after two years. For the December quarter, the company's electric vehicle sales were INR 8 billion, which constitutes around 9% of the company's total revenues for the quarter. The management expects to see good growth in the electric vehicle segment in India, considering the increased competitiveness in the industry and on the back of new product launches.
TVS Motor's net profit for the December quarter rose 4% on year to INR 6.18 billion. The company's revenues were up 10% on year at INR 90.97 billion. Both top line and bottom line missed the Street's estimates. The December quarter also marked the lowest on-year growth in both the metrics for the company in the last 11 quarters. On Tuesday, shares of the company closed at INR 2,335.80 on the National Stock Exchange, up 4.7% from the previous close. End
Reported by Akshay V. Johnson
Edited by Tanima Banerjee
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