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Informist, Tuesday, Oct. 28, 202

By Gopika Balasubramanium and Anand JC

MUMBAI – TVS Motor Co. Ltd. Tuesday said it expects the two-wheeler industry to grow 8% year-on-year in the next two quarters, mainly driven by the benefit of cut in goods and services tax rate. Rural and urban areas largely contribute equally to the company's top line, but rural areas will see a pickup in the growth trajectory and match the performance of urban areas, the company's management told analysts in a post-earnings conference call.

The company's management believes that improvement in connectivity infrastructure will also drive growth for two-wheelers in rural areas. "The road connectivity and infrastructure investment in India has been brilliant...and two-wheeler is the best mobility solution and rural is the most important driver," the management said.

While retail sales of the two-wheeler industry grew 24% this festival season compared to last one, the company's sales grew 32%, TVS Motor said. The sales in rural areas grew 22% on year and that in urban areas rose a little quicker at 26%.

TVS Motor is confident that its growth in its three-wheeler portfolio will be ahead of its peers. "The EV (electric vehicle) segment in three wheelers has started doing extremely well for us and we are very confident that we will start growing ahead of the industry here as well," the management told analysts. The company said its market share in three-wheeler portfolio almost doubled even though its presence in India is still limited. Currently, the company has 11% share in the electric three-wheeler market. The company is currently focussed on building networks for three-wheelers, including new branches. The company has added 100 touch points for its three-wheeler portfolio so far this year

TVS Motor said the shortage in availability of rare earth magnets continues to be a hurdle and is expected be so in the short-medium term. During the September quarter, the company faced challenges due to the same for its electric vehicle portfolio. Had it not been for the rare earth magnet shortage, the management said the electric vehicle industry would have performed much better. The company's electric two-wheelers sales grew 7% on year, it said.

The company is planning to launch Norton motorcycles in India by April, its management told analysts. The company said it will have a different sales strategy in India for Norton and some of its premium vehicles. Norton has already started planning for the distribution system in Europe, the company said. "...you will see Norton products and it is going to definitely redefine the super premium categories all over the world," the management said.

TVS Motor announced its September quarter results towards the close of trading hours. The company reported record high revenue and net profit, driven primarily by record high sales. The company reported a net profit of INR 9.06 billion on a revenue of INR 119.05 billion. Shares of the company closed more than 2% lower at INR 3,562 on the National Stock Exchange.  End

Edited by Ashish Shirke

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