TVS Motor Company Ltd, India’s third largest two-wheeler manufacturer, on Thursday reported a 13% year-on-year fall in its standalone income for the quarter ending September due to subdued domestic sales across its product portfolio. The company reported a total income of 4,353 crore for July-September compared with 4,994 crore in the year-ago period.

The company’s total vehicle sales stood at 8,86,000 units during the quarter under review, down 19% year-on-year. While three-wheeler volumes grew during Q2, all other vehicle categories, including motorcycles, scooters and mopeds, saw a decline in the second quarter.

TVS Motor also reported a sharp 30% decline in sales of mopeds during Q2, thanks to high rural exposure and as the category possibly faced the worst impact of increase in insurance costs. However, two-wheeler exports, the company said, rose 4% YoY during the last quarter.

Notably, TVS Motor’s profit before tax (PBT) for Q2 stood at 310 crore as against 306 crore in the year-ago period. The spike in PBT was on account of an exceptional gain of 76 crore in the form of reversal of NCCD provision for Himachal plant pertaining to earlier years, the company said in a statement. As a result, the company’s net profit for the period stood at 255 crore, up 21% YoY.

The company management lowered its guidance for FY20 domestic two-wheeler industry, citing delayed economic recovery.

While TVS Motor has been focusing on cost reduction across operations, September quarter results underscore a substantial drop in total expenditure, primarily driven by reduced cost of materials consumed. Total standalone expenditure for Q2FY20 stood at 4,118 crore as against 4,688 crore in year-ago period. The cost of materials consumed saw savings of about 550 crore in the fiscal second quarter.

On the consolidated front, while the total income for Q2FY20 stood at 4,967 crore, down 9% YoY, PAT was at 257 crore, up 15%. The company said its EBIDTA (earnings before interest, tax, depreciation and amortization) margin for Q2FY20 stood at 8.8% compared with 8.6% in Q2FY19 and 8% in Q1FY20.

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