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Informist, Thursday, Oct. 23, 2025

 

By Anand JC

 

MUMBAI – Strong, double-digit growth in two-wheeler and three-wheeler despatches during the September quarter will likely propel revenue growth of TVS Motor Co. Ltd. to a 12-quarter high, according to analysts. The company's operating margin could get a boost from better operating leverage but higher advertising expenses are likely to limit margin growth, analysts said.

 

TVS Motor is expected to report a net profit of INR 9.58 billion for the September quarter, up 45% from INR 6.63 billion in the year-ago quarter, according to an average of estimates from 13 analysts. This would be the 12th time that TVS Motor's net profit has grown in double digits in the last 13 quarters, barring the December quarter of 2024 when it had grown only 4%. Net profit projections range from a low of INR 9.12 billion by broking firm Prabhudas Lilladher to a high of INR 10.03 billion by Emkay Global Financial Services.

 

The Chennai-based automotive giant's net sales for the reporting quarter are expected to be INR 117.70 billion, up 28% from INR 92.28 billion in the year ago quarter, according to an average of 13 estimates. The forecast of INR 122.26 billion by Emkay Global is the highest and of INR 114.82 billion by Nomura Equity Research is the lowest.

 

Most two-wheeler companies are set to report good earnings growth for the September quarter, fueled by festival-season dealer stocking, a cut in the goods and services tax, and aggressive discounts by manufacturers. For TVS Motor, the strong top line growth projections follow a sharp increase in despatches during the quarter.

 

TVS Motor sold 1.51 million vehicles during the quarter, up 23% on year and 18% on quarter. Only one competitor eclipsed this growth percentage in the reporting quarter – Royal Enfield-maker Eicher Motors Ltd., which sold 326,375 motorcycles, up 43% on year. Despite pressure from rare earth magnet shortage, TVS Motor's iQube electric scooter emerged as the most-sold electric two-wheeler during the September quarter, Prabhudas Lilladher said.

 

The average selling price of TVS Motor's vehicles was INR 75,100 in the September quarter last year, which increased moderately to INR 78,900 in the June quarter, Motilal Oswal Financial Services said in a note. A higher share of electric vehicles, premium motorcycles, and three-wheelers in its portfolio could lift TVS Motor's realisations by 3-5% in the September quarter, according to analysts.

 

The earnings before interest, tax, depreciation, and amortisation of TVS Motor is expected to surge nearly 40% on year to INR 15.10 billion, according to an average of 11 estimates. The projection of INR 14.48 billion by Nuvama Wealth Management is the lowest and of INR 15.53 billion by Prabhudas Lilladher is the highest.

 

TVS Motor had reported an EBITDA margin of 11.7% in the year-ago quarter and of 12.5% in the June quarter. "EBITDA margin is anticipated to expand by 105 bps, supported by improved operating leverage, a richer product mix, PLI (production-linked incentive) benefits and continued cost optimization initiatives," Nirmal Bang said in a note. The production-linked incentive scheme contributed around 0.5% to the company's EBITDA margin the June quarter. TVS Motor expected to accrue PLI benefits for its electric three-wheelers June onwards, its management had told analysts in a post-earnings conference call back in August.

 

Nomura expects the EBITDA margin of TVS Motor to grow 95 bps on quarter to around 13.5% due to depreciation of the rupee as the company increased its exports. The uptick in EBITDA margin is projected to be limited by higher input prices and increased marketing and advertisement expenses.

 

TVS Motor will announce its financials for the September quarter on Tuesday. Its shares have climbed roughly 30% since the company reported its June quarter earnings on Jul. 30.

 

Of the 21 research reports on the company available with Informist, 13 have a 'buy' rating on TVS Motor with an average target price of INR 2,932. Three have a 'sell' call, while five have a 'hold' rating on the stock. At 1442 IST, shares of the company traded at INR 3,606.60 on the National Stock Exchange, down 1.4% from previous close.

 

The following are the Jul-Sept earnings estimates for TVS Motor from 13 brokerages in descending order of the estimates of net profit in INR million:

 

Broker	Net sales	Net profit	EBITDA
Emkay Global Financial Services Ltd	122,264	10,033	15,528
Nomura Equity Research	114,823	10,001	15,472
Motilal Oswal Financial Services Ltd	118,886	9,844	15,455
Axis Securities Ltd	118,890	9,700	15,360
HDFC Securities Ltd	119,542	9,692
Nuvama Wealth Management Ltd	118,698	9,596	14,885
ICICI Securities Ltd	117,757	9,532	15,073
JM Financial Institutional Securities Pvt Ltd	117,460	9,526	15,065
Kotak Securities Ltd	117,659	9,442	15,059
YES Securities (India) Ltd	117,757	9,361	14,894
Anand Rathi Share and Stock Brokers Ltd	115,136	9,358
Nirmal Bang Equities Pvt Ltd	116,276	9,282	14,825
Prabhudas Lilladher Pvt Ltd	114,923	9,120	14,480
Average	117,698	9,576	15,100

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Ashish Shirke

 

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