TVS Motor had a bumper Q2. Can Norton lift it higher?
Norton, TVS's super-premium bike, will be launched at the International Two-Wheeler Exhibition in Italy next week.
TVS Motor Co. Ltd’s standalone Ebitda rose as much as 40% year-on-year to ₹1,500 crore in the September quarter (Q2FY26), driven by higher volumes and improved realization. Sales volume increased by an impressive 23% to 1.51 million units thanks to improved retail financing with lower interest rates, GST cuts, and other factors, higher than 17% growth recorded in Q1. Average realization stood at ₹79,000 per vehicle, up 5%, helped by the price hikes undertaken at the start of Q2 to offset the increase in raw material costs.
TVS’s revenue increased 29% to ₹11,900 crore. A comparatively stronger performance in Q2 helped H1FY26 revenue and Ebitda to grow by 25% and 36%, respectively. Exports grow at a faster 30% rate in Q2 and now contribute a little over 25% of total volumes. This share may increase further as the company focuses on Latin America, where it has a relatively small market share and hopes to grow faster than the industry average.
TVS’s two-wheeler volumes increased 21% year-on-year as against a largely flat performance by the industry, management said during the earnings call. Thus, its two-wheeler market share has increased by 200 basis points to 19.6%, as per a 29 October report by ICICI Securities.
In H2FY26 the industry is expected to grow by 8%, primarily aided by the GST cuts, with TVS outperforming. For entry-level customers, GST cuts have led to savings of almost ₹7,000. During the festive season this year TVS Motor recorded 32% growth over last year’s festive season sales, versus the industry’s 24% growth, according to management.
Premium bet
The company could get a big boost from the launch of Norton, its super-premium bike, at the International Two-Wheeler Exhibition in Italy next week. TVS has made significant investments in design, engineering, and product development for Norton, which it acquired in 2020. The India launch is scheduled for April, and the company is thinking about setting up a separate distribution network for Norton. “Success of upcoming EV 2W/3W launches and premium Norton motorcycles could drive further upside," noted a Nomura Global Markets Research report. The broking firm expects TVS to grow earnings per share at a 25% compound annual rate over FY26-28.
Scooters, which account for 42% of total volume, grew by 30% in Q2. The segment got a boost from the launch of the 150-cc TVS NTORQ 150 in September. While three-wheelers sales rose faster (41%), the segment accounts for just 3.5% of total volume. The company is expanding its three-wheeler network to maintain the growth momentum, and added 100 touch points in H1.
However, electric vehicles (EV) face uncertainty thanks to magnet availability issues. EV growth was 7% in Q2 versus 35% in Q1. On the plus side, the EV portfolio remains positive on a gross margin basis and profitability should improve with increasing scale. Also, most of its EV portfolio is now eligible to receive incentives under the government’s production-linked incentive (PLI) scheme.
Investors aren’t complaining, with TVS’s shares up around 48% so far in 2025 on the back of strong sales, sustained margins, and improved outlook. The stock trades at 48 times estimated FY26 earnings, according to Bloomberg. How the market accepts a super-premium bike like Norton will be a key factor for investors to monitor.
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