TVS Motor Co. Ltd announced better-than-expected earnings for the January-March period, citing strong scooter sales in the country that helped it record its highest-ever profit during the last fiscal year.
The Hosur-based TVS, which doesn’t give forward guidance for growth, remains optimistic that the growth momentum during the current year will continue due to a reduction in interest rates, relief in income tax and a normal monsoon.
During January-March, the third-largest two-wheeler seller saw its net profit jump 76% to ₹852 crore, up from ₹485 crore in the year-ago period. Total revenue grew by 17% to ₹9,565 crore, up from ₹8,140 crore in the year-ago period.
A Bloomberg poll of analysts had predicted ₹731 crore profit and ₹9,283 crore revenue during the quarter.
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For the full year, its profit grew by over 30% to ₹2,710 crore, while revenue rose 14% to ₹36,309 crore.
“We expect the strong growth momentum to continue. The first quarter may see flattish growth due to the base effect in April, but a good marriage season will lead to better growth in the following months,” TVS Motor CEO K.N. Radhakrishnan told analysts during a post-results earnings call.
During the previous financial year, the company recorded its highest-ever sales figure at 4.7 million, led by strong momentum in the scooter segment. As per Society of Indian Automobile Manufacturers (SIAM) data, its scooter sales jumped by 25% to reach 1.8 million units in the domestic market during the last fiscal year.
The scooter segment’s strong growth offset the decline in motorcycle sales. In the previous fiscal year, motorcycle sales in the company’s domestic market declined 2% to 1.2 million units.
Scooter versus motorcycle
“The share of scooters in the overall market was around 38%. It will go up. A big reason has been the increasing penetration of electric scooters,” Radhakrishnan said.
With TVS Motor’s sales growth remaining strong, it was able to outpace Hero Motocorp Ltd. As against a 5% growth for the Delhi-based firm, TVS recorded a 12% jump in its two-wheeler sales.
The management highlighted that its electric scooters continue to attract great traction from customers, and it will continue to invest heavily in introducing new products. During the current fiscal year, there will be more launches in the space.
According to the company’s statement, its electric vehicle sales grew by 44% to 2.79 lakh units in the year 2024-25, as against 1.94 lakh units during 2023-24.
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However, the firm remains hopeful that some of its products, such as the TVS Raider in the 125 cc range and the Apache bike series, will do well.
On the international front, the company is optimistic about growth in key markets such as Africa, Latin America, and Asia.
“Latin America and Asia have done well. Performance in Africa was mixed due to a slowdown in some key markets. We remain quite optimistic that our growth in both domestic and international markets will be higher than the industry’s growth,” Radhakrishnan noted.
Analysts remain optimistic about the company’s growth prospects.
“Higher salience for scooters and their increasing share in the market is a net positive for the company. They are able to maintain good margins along with expansion in the scooter market,” Saji John, senior research analyst at Geojit Financial Services, said.
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Rise in competition
“However, one thing to watch out for will be how the company will build on its total sales from here, given they are on such a high base. The competition is also increasing in the scooter segment, particularly in EVs.”
In the financial year 2024-25, Bajaj Auto increased its sales in electric vehicles by more than 100% to cross the 2-lakh mark. The difference in market share with TVS also closed down to 0.6% from 8% earlier.
TVS Motor’s shares during the year have grown by 15% as against a 3.4% fall in Nifty Auto.
