TVS records Ebitda margin high, takes aim at premium wheels
- The company recently introduced the TVS X at ₹2.5 lakh ex-showroom, which puts it at the very top end of electric scooters in India
New Delhi: Two-wheeler maker TVS Motor Company is putting together a line-up of super-premium products under British motorcycling brand Norton, which it had acquired in 2020, a top company executive said on Monday.
The maker of iQube electric scooters recently introduced the TVS X, an electric motorcycle-scooter crossover, at ₹2.5 lakh ex-showroom, which puts it at the very top end of electric scooters in India. "India will be the largest market for the TVS X and every other product we introduce. Super-premium and premium will be the order of the day in India", KN Radhakrishnan, chief executive officer, TVS Motor Company said in a post-earnings call.
The company on Monday reported a nearly 32% increase in net profit to ₹536 crore for the quarter ended 30 September compared to the same quarter last year. It clocked a record-high earnings before interest, taxes, depreciation and amortisation (Ebitda) margin at 11% for the quarter, up 47 basis points from 10.6% in the previous quarter, marking all-time high margins in two consecutive quarters on the back of higher revenues and cost-reduction efforts, Radhakrishnan said. Revenue from operations grew 13% to ₹8,145 crore for the quarter from Rs. 7,219 crore in the same quarter last year.
The company sold 10.74 lakh two-wheelers and three-wheelers in this period, marking 5% growth year-on-year, including 10% growth in scooter sales and 3% in motorcycles. It also sold 58,000 units of the iQube electric scooter in the quarter. It said its export growth surpassed that of peers.
The company said it is now preparing to start deliveries of the TVS X in India, followed by international deliveries starting next fiscal year. Indonesia is the first overseas market where the product will be launched. "We have to build the TVS brand globally. We don't only want to be in developing economies, but also in developed economies," Radhakrishnan said. "We are looking at a pipeline of products on the EV side over the next four quarters. India will be the biggest market for TVS X and any other brand that TVS launches.”
TVS also expects the iQube to boost its market share in the scooter category, which currently stands at 32%. "We expect that the iQube will significantly aid our scooter market share and aid the sales of the Jupiter", Radhakrishnan said. He added that TVS's EVs are contribution-margin positive and that declining cost of battery cells, change in cell technologies, and economies of scale will help to improve the economics of its EV business.
On the cost front, TVS said it does not foresee any increase in commodity prices going forward, and instead expects to benefit from the price hikes it has made through Q2 FY24 and in October, and softening commodity prices.
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First Published:31 Oct 2023, 10:18 AM IST
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