Analyst Concall
TVS Motor expects to beat industry sales growth FY26
This story was originally published at 19:16 IST on 28 April 2025
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--TVS Motor: Demand for vehicle replacements may revive on better monsoon
--TVS Motor: Plan to launch new electric vehicles in coming quarters
--CONTEXT: Comments by TVS Motor management in post-earnings conference call
--TVS Motor: See some challenges in exports to West Asian countries
--TVS Motor: Exports to Latin American countries encouraging
--TVS Motor: See better demand from African markets in FY26
--TVS Motor: See co's sales growth above industry in EV segment
--TVS Motor: Scooter sales will continue to grow in coming quarters
--TVS Motor: See demand for scooters growing faster than other categories
--TVS Motor:Normal monsoon, marriage season to drive 2-wheeler sales May-Jun
--TVS Motor: Domestic demand may pick up Jul-Sep onwards
--TVS Motor: Expect better traction in exports in FY26 as FY25 base low
--TVS Motor:Plan major capex on new pdts, technology, capacity expansion FY26
--TVS Motor: Expect returns from Norton Motorcycles to start from FY26
By Narayana Krishna and Shakshi Jain
HYDERABAD/MUMBAI - TVS Motor Co. Ltd. hopes to surpass the two-wheeler industry's growth in the financial year 2025-26 (Apr-Mar) as it sees demand picking up from Jul-Sept, the management said in a post-earnings call with analysts. Apart from the likely favourable monsoon, the marriage season during May-Jun may also drive two-wheeler sales in the country, helping the company to do better, it said.
For FY25, TVS Motor reported a net profit of INR 27.11 billion, up 30%, on a revenue of INR 362.51 billion, up 14%. The company's two- and three-wheeler sales for FY25 added up to 4.74 million units, up 13% on year. The company's motorcycle sales in FY25 were up 10% at 2.20 million units, and scooter sales for the year were up 21% at 1.90 million units.
TVS Motor's management was confident that demand for scooters would continue to rise in the coming quarters. This category is now growing faster than other two-wheeler segments, it said. TVS Motor also expects sales of its electric scooters to surpass industry growth in FY26. TVS Motor's i-Qube is the flagship brand of the company's e-scooters business.
For the March quarter, the Chennai-based automobile company reported a net profit of INR 8.52 billion, up 76% on year, propelled by benefits from the government's production-linked incentive scheme of FY25. The company's sales for the quarter were up by 17% on year at INR 95.50 billion, led by robust growth across segments. The production-linked incentives accounted for 0.5% of the operating margin, also known as the earnings before interest, taxation, depreciation, and amortisation margin, the management said. For Jan-Mar, TVS Motor reported its EBITDA margin at 14.0%.
Besides seasonal demand, TVS Motor expects vehicle replacement to pick up during the year, as rural incomes are expected to grow if the forecast of an above-normal monsoon holds good. However, the management also said the industry witnessed a blip in rural demand during April. Demand for scooters is more in urban areas led by electric vehicles, the company said.
TVS Motor is more focused on investing in technology, product development, and analytics. Some investment may also go towards capacity expansion. However, the company did not disclose the planned capital expenditure for FY26. It said there are a couple of new products being developed with technology enhancement, which will be launched in the coming quarters. The new launches are also expected to boost sales, the management said.
According to the management, the company also expects exports to gain traction during FY26 as the base in FY25 was low. The management said demand for its products in Latin America and Africa is expected to be robust, while there are some challenges in West Asian countries. TVS Motor exports its two- and three-wheelers to over 80 countries across Asia, Africa, and Latin America.
The management said it is expecting returns from its investment in European motorcycle maker Norton Motors in the current financial year. The market in Europe is witnessing some stress at present, but the company said it is confident of achieving returns, and there is no need to go for impairment for Norton Motors as of now.
On Monday, shares of TVS Motor ended 2% higher at INR 2,793.10 on the National Stock Exchange. The company detailed its March quarter and FY25 results shortly before the market closed. End
Edited by Rajeev Pai
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