28-Oct-2026 22:16:59
TVS MOTOR COMPANY LTD Q2 CONCALL: CONTINUED INDUSTRY OUTPERFORMANCE EXPECTED IN H2 FY27, EV MONTHLY CAPACITY EXPANSION TO 80,000 UNITS, EBITDA MARGIN IMPROVEMENT & CONSUMER FINANCE DEMERGER TARGETED IN 8–10 MONTHS
• MANAGEMENT EXPECTS TVS MOTOR TO CONTINUE OUTPERFORMING THE DOMESTIC TWO-WHEELER INDUSTRY DURING Q3 & Q4 FY27, SUPPORTED BY NEW PRODUCTS, PREMIUMIZATION & STRONG BRAND DEMAND • MANAGEMENT EXPECTS GOOD SINGLE-DIGIT GROWTH IN THE DOMESTIC ICE TWO-WHEELER INDUSTRY DURING Q3 FY27, WITH TVS TARGETING GROWTH ABOVE THE INDUSTRY AVERAGE • MANAGEMENT EXPECTS EXPORT VOLUMES TO CONTINUE OUTPERFORMING INDUSTRY GROWTH, SUPPORTED BY PRODUCT LAUNCHES & EXPANDING DISTRIBUTION ACROSS INTERNATIONAL MARKETS • MANAGEMENT EXPECTS STRONGER THREE-WHEELER GROWTH DURING Q3 & Q4 FY27, SUPPORTED BY HIGHER PRODUCTION CAPACITY, NEW PRODUCTS & IMPROVED VEHICLE AVAILABILITY • MANAGEMENT PLANS TO EXPAND ELECTRIC TWO-WHEELER MONTHLY PRODUCTION CAPACITY FROM APPROXIMATELY 60,000–65,000 UNITS TO AROUND 80,000 UNITS • MANAGEMENT EXPECTS EV SALES MOMENTUM TO REMAIN STRONG, SUPPORTED BY PRODUCTION EXPANSION, NEW VARIANTS, DISTRIBUTION GROWTH & INCREASING RURAL ADOPTION • MANAGEMENT PLANS TO EXPAND TOTAL TWO-WHEELER ANNUAL PRODUCTION CAPACITY BEYOND 8 MILLION UNITS, SUPPORTING LONG-TERM DOMESTIC & EXPORT GROWTH • MANAGEMENT PLANS TO INCREASE THREE-WHEELER ANNUAL PRODUCTION CAPACITY TOWARD APPROXIMATELY 4 LAKH UNITS, SUPPORTING ICE & ELECTRIC VEHICLE DEMAND • MANAGEMENT EXPECTS CONTINUED EBITDA MARGIN IMPROVEMENT THROUGH PREMIUM PRODUCT MIX, SELECTIVE PRICE INCREASES, COST REDUCTION & OPERATING LEVERAGE • MANAGEMENT EXPECTS Q3 FY27 COMMODITY COST INCREASES TO BE SMALLER THAN THOSE EXPERIENCED IN H1 FY27, WITH POTENTIAL STABILIZATION OR MODEST SOFTENING DURING Q4 • MANAGEMENT HAS IMPLEMENTED SMALL PRICE INCREASES DURING Q3 TO PARTLY OFFSET RAW-MATERIAL INFLATION WHILE MAINTAINING CUSTOMER AFFORDABILITY • MANAGEMENT EXPECTS EV PROFITABILITY TO IMPROVE QUARTER AFTER QUARTER THROUGH HIGHER SCALE, BETTER PRODUCT MIX & OPERATIONAL EFFICIENCIES • MANAGEMENT DID NOT DISCLOSE SEPARATE EV GROSS MARGIN OR EBITDA MARGIN FIGURES, EITHER INCLUDING OR EXCLUDING PLI INCENTIVES • MANAGEMENT EXPECTS THE TVS IQUBE & ORBITER ELECTRIC SCOOTER PORTFOLIOS TO BENEFIT FROM HIGHER PRODUCTION CAPACITY & EXPANDING DISTRIBUTION • MANAGEMENT ASPIRES TO INCREASE RONIN SALES ABOVE 15,000 UNITS, ALTHOUGH THE RELEVANT PERIOD WAS NOT EXPLICITLY SPECIFIED IN THE TRANSCRIPT • MANAGEMENT EXPECTS INTERNATIONAL ELECTRIC TWO-WHEELER SALES TO EXPAND THROUGH NEW PRODUCTS & DISTRIBUTION DEVELOPMENT • MANAGEMENT EXPECTS NEW PRODUCT LAUNCHES IN NEPAL, SRI LANKA, KENYA, EGYPT & INDONESIA TO SUPPORT CONTINUED EXPORT MOMENTUM • MANAGEMENT EXPECTS NORTON MOTORCYCLE LAUNCHES IN INDIA DURING THE COMING MONTHS, FOLLOWING INITIAL EXPANSION ACROSS SELECTED EUROPEAN MARKETS • MANAGEMENT PLANS TO EXPAND NORTON'S DEALER NETWORK ACROSS THE UK, ITALY, FRANCE, GERMANY, SPAIN, INDIA & EVENTUALLY THE UNITED STATES • MANAGEMENT EXPECTS ADDITIONAL NORTON MODEL ANNOUNCEMENTS AROUND EICMA, SUPPORTING ITS PREMIUM GLOBAL MOTORCYCLE STRATEGY • MANAGEMENT ACKNOWLEDGED THAT NORTON WILL REMAIN IN AN INVESTMENT PHASE, WITH PRODUCT DEVELOPMENT, BRAND-BUILDING & LAUNCH EXPENSES AFFECTING SUBSIDIARY PROFITABILITY • THE BOARD APPROVED THE PROPOSED DEMERGER OF THE CONSUMER FINANCE BUSINESS INTO A SEPARATELY LISTED ENTITY, SUBJECT TO REGULATORY, SHAREHOLDER & NCLT APPROVALS • MANAGEMENT EXPECTS THE CONSUMER FINANCE DEMERGER PROCESS TO TAKE APPROXIMATELY 8–10 MONTHS, SUBJECT TO RECEIPT OF REQUIRED APPROVALS • UNDER THE PROPOSED DEMERGER, EXISTING TVS MOTOR SHAREHOLDERS WILL RECEIVE SHARES IN THE NEW LISTED FINANCE HOLDING COMPANY ON A MIRROR-SHAREHOLDING BASIS • MANAGEMENT CLARIFIED THAT THE NEW HOLDING COMPANY WILL OWN THE DEMERGED CONSUMER FINANCE UNDERTAKING, INCLUDING INVESTMENTS IN TVS CREDIT SERVICES • FOLLOWING COMPLETION OF THE PROPOSED DEMERGER, TVS MOTOR ITSELF WILL NO LONGER HOLD THE DEMERGED CONSUMER FINANCE ASSETS • MANAGEMENT DISCUSSED A POTENTIAL ADDITIONAL ₹1,200 CR INVESTMENT IN TVS CREDIT, DEPENDING ON FUTURE CAPITAL REQUIREMENTS; THIS WAS NOT A CONFIRMED CAPITAL INFUSION • MANAGEMENT CLARIFIED THAT THE EARLIER ₹711 CR TRANSACTION WAS A SECONDARY SHARE PURCHASE, NOT FRESH CAPITAL INFUSED INTO TVS CREDIT • MANAGEMENT EXPECTS TO DISCUSS FY28–FY29 INVESTMENT REQUIREMENTS IN A SUBSEQUENT QUARTER, WITHOUT PROVIDING FIRM NUMERICAL GUIDANCE DURING THIS CALL • MANAGEMENT DID NOT PROVIDE A PRECISE FY27 REVENUE GROWTH TARGET, EBITDA MARGIN FORECAST OR PAT GUIDANCE • Q2 FY27 REVENUE INCREASED 44% YOY TO ₹17,103 CR FROM ₹11,905 CR, MARKING THE COMPANY'S HIGHEST-EVER QUARTERLY REVENUE • Q2 EBITDA INCREASED 47% YOY TO ₹2,219 CR FROM ₹1,507 CR, SUPPORTED BY HIGHER VOLUMES, PREMIUMIZATION & OPERATING LEVERAGE • Q2 EBITDA MARGIN IMPROVED TO 13.0% FROM 12.7% LAST YEAR, REPRESENTING AN EXPANSION OF APPROXIMATELY 30 BPS • Q2 PAT INCREASED 52% YOY TO ₹1,377 CR FROM ₹904 CR, REFLECTING STRONG PROFIT GROWTH • Q2 PROFIT BEFORE TAX INCREASED TO ₹1,865 CR FROM ₹1,224 CR IN THE PREVIOUS YEAR • Q2 VEHICLE SALES REACHED A RECORD APPROXIMATELY 1.9 MILLION UNITS, REPRESENTING 27% YOY VOLUME GROWTH • H1 FY27 REVENUE INCREASED 41% YOY TO ₹30,999 CR, WHILE PBT GREW 52% TO ₹3,454 CR • H1 FY27 PAT INCREASED 52% YOY TO ₹2,551 CR, REFLECTING SUSTAINED EARNINGS MOMENTUM • DOMESTIC ICE TWO-WHEELER SALES INCREASED 16% YOY, OUTPERFORMING INDUSTRY GROWTH • DOMESTIC ELECTRIC TWO-WHEELER SALES INCREASED 129% YOY, COMPARED WITH APPROXIMATELY 84% INDUSTRY GROWTH • TVS IQUBE CROSSED 1 MILLION CUMULATIVE UNITS SOLD, MARKING AN IMPORTANT MILESTONE IN THE COMPANY'S ELECTRIC MOBILITY BUSINESS • EV PENETRATION IN THE OVERALL TWO-WHEELER INDUSTRY REACHED APPROXIMATELY 11.6% IN SEPTEMBER 2026, WITH PENETRATION IN SCOOTERS AROUND 22% • INTERNATIONAL VEHICLE SALES INCREASED 35% YOY TO APPROXIMATELY 5.39 LAKH UNITS, SUPPORTED BY DEMAND ACROSS AFRICA, LATIN AMERICA & ASIA • Q2 EXPORT REVENUE REACHED APPROXIMATELY ₹4,378 CR, REFLECTING STRONG INTERNATIONAL BUSINESS CONTRIBUTION • INTERNATIONAL ELECTRIC TWO-WHEELER SALES INCREASED TO APPROXIMATELY 6,930 UNITS FROM 1,726 UNITS LAST YEAR • TOTAL THREE-WHEELER SALES VOLUMES INCREASED APPROXIMATELY 47% YOY, SUPPORTED BY DOMESTIC DEMAND & ELECTRIC VEHICLE ADOPTION • DOMESTIC THREE-WHEELER SALES INCREASED APPROXIMATELY 65% YOY TO 26,300 UNITS FROM AROUND 16,000 UNITS LAST YEAR • DOMESTIC THREE-WHEELER INDUSTRY EV PENETRATION REACHED APPROXIMATELY 44% DURING Q2, INCREASING TOWARD 48% IN SEPTEMBER • TVS CREDIT'S LOAN BOOK INCREASED 22% YOY TO APPROXIMATELY ₹33,818 CR, REFLECTING CONTINUED CONSUMER FINANCE EXPANSION • TVS CREDIT'S Q2 PBT INCREASED 19% YOY TO APPROXIMATELY ₹330 CR, WITH NET WORTH OF AROUND ₹6,500 CR • TVS CREDIT SERVED APPROXIMATELY 2.7 CR CUSTOMERS, FINANCED AROUND 14 LAKH NEW CUSTOMERS DURING Q2 & OPERATED THROUGH MORE THAN 65,000 DISTRIBUTION TOUCHPOINTS • MANAGEMENT INDICATED APPROXIMATELY 1.9% MATERIAL-COST INFLATION DURING Q1–Q2, AGAINST CORRESPONDING SELLING-PRICE INCREASES OF AROUND 1.6% • MANAGEMENT EXPECTS PREMIUM VARIANTS, PRODUCT MIX IMPROVEMENT & COST EFFICIENCIES TO HELP OFFSET THE REMAINING COMMODITY INFLATION PRESSURE • KEY RISKS INCLUDE PERSISTENT RAW-MATERIAL INFLATION, HIGH PRIOR-YEAR COMPARISON BASE, EV CAPACITY EXECUTION, NORTON & E-BIKE SUBSIDIARY LOSSES, DEMERGER APPROVAL DELAYS & HIGHER PRODUCT DEVELOPMENT SPENDING • OVERALL OUTLOOK REMAINS STRONGLY POSITIVE, WITH KEY MONITORABLES INCLUDING CONTINUED INDUSTRY OUTPERFORMANCE IN Q3–Q4 FY27, EV CAPACITY EXPANSION TOWARD 80,000 UNITS PER MONTH, FURTHER EBITDA MARGIN IMPROVEMENT, NORTON LAUNCHES & COMPLETION OF THE CONSUMER FINANCE DEMERGER
TVS MOTOR COMPANY LTD