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    TVS Motor Company Limited

    TVSMOTOR
    Automobile and Auto Components·31 Jul 2025
    Management Summary

    TVS Motor Company reported a strong Q1 FY26, achieving its highest-ever revenue of ₹10,081 crores, driven by robust volume growth across segments and improved operating margins. While EV sales showed significant growth, the company acknowledged challenges related to magnet availability and a slower e-bike market in Europe. Management expressed confidence in continued growth ahead of the industry, supported by new product launches and strategic investments.

    Highlights

    5

    • Revenue reached an all-time high of ₹10,081 crores, marking a 20% YoY growth.

    • Operating EBITDA increased by 32% to ₹1,263 crores, with the margin expanding by 100 basis points to 12.5%.

    • Profit after tax (PAT) saw a significant 35% growth, reaching ₹779 crores.

    • EV two-wheeler sales volume surged by 35% to 70,000 units, and three-wheeler sales grew by 46% to 45,000 units.

    • TVS Credit's PBT grew 30% to ₹243 crores, with a book size of ₹26,900 crores.

    Concerns

    4

    • Challenges in the availability of magnets for EV production, requiring short-term mitigation and long-term actions.

    • Industry decline of 3% in two-wheeler ICE sales in Q1, with TVS domestic ICE sales growing only 8%.

    • Moderate growth expected in July, August, September for domestic ICE business due to some challenges in July.

    • E-bike business is currently slow due to the economy in Europe, though management expects future breakeven.

    What Changed1

    vs Q2 FY26

    Risks discussed3 → 4 (+1)

    Key financials

    Single quarter

    05 metrics
    1. 01Revenue₹10,081 Cr+20%YoY
    2. 02Operating EBITDA₹1,263 Cr+32%YoY
    3. 03Operating EBITDA Margin12.5%
    4. 04PBT₹1,053 Cr+35%YoY
    5. 05PAT₹779 Cr+35%YoY

    Segment breakdown

    Domestic ICE Two-Wheeler Sales
    8% Volume Growth
    International Two-Wheeler Sales
    40% Volume Growth
    Total ICE Two-Wheeler Sales
    16% Volume Growth
    EV Two-Wheeler Sales
    70,000 Volume35% Volume Growth₹1,000 Cr Revenue
    Total Three-Wheeler Sales
    45,000 Volume46% Volume Growth
    TVS Credit
    ₹243 Cr PBT30% PBT Growth₹26,900 Cr Book Size
    Exports
    ₹2,487 Cr Revenue
    Spare Parts
    ₹987 Cr Revenue
    List

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    ₹1,600 crores

    Debt

    Debt disclosed

    M&A

    Norton

    acquisition · integrated

    M&A

    E-bike companies

    acquisition · integrated

    Guidance & targets

    7
    CategoryTargetPriority
    Investment
    Total Investment
    INR2,000 crores
    		High
    Capex
    Total Capex
    INR1,600-1,700 crores
    		High
    Product Launch
    Norton new products
    multiple new products
    		High
    Regulatory Benefit
    PLI for EV 3-wheelers
    start from next quarter
    		High
    Market Position
    Prominent space in EV 3-wheeler category
    prominent place
    		Medium
    Profitability
    EBITDA Margin
    continuously improve
    		Medium
    Volume Growth
    Domestic ICE Business
    moderate growth
    		Medium

    What to watch in Q2 FY26

    5

    Norton product launches

    Q3/Q4 FY26 (this financial year) and Q1 FY27 (next financial year)
    CurrentFinal stages of product preparation
    TargetMultiple new products launched

    Why it matters

    Key to realizing returns on significant Norton investments and expanding the premium segment.

    I think the Norton will have the products Q3 and Q4 of this year. And I'm very sure next year summer; you will see these products in Europe.

    Risks & concerns

    4
    RiskSeverity

    Magnet availability for EV production

    Challenges in magnet availability for EVs require short-term mitigation and long-term actions like HRE-free technologies and alternate sourcing. — Management acknowledged

    high

    Potential for over-rain and flood impacting rural economy

    While monsoon arrival is early and positive, excessive rain and floods could negatively impact the rural economy. — Management acknowledged

    medium

    Slowdown in e-bike sales due to European economy

    The e-bike business is currently slow due to economic conditions in Europe, though breakeven is expected in the medium term. — Management acknowledged

    medium

    Commodity price increase in Q2

    Expected 0.5% increase in commodity prices, particularly steel, for Q2, to be mitigated by price increases, product mix, and cost reduction. — Management acknowledged

    low

    Q&A highlights

    8

    “In the ICE if you look at it, this quarter, the rural growth was only 3.3%, while the average is 4%, okay? And one of the reasons could be that this year, we have seen the monsoon a little bit early as well as the start of sowing, which is early, while this is definitely likely to do better for Q2 onwards.”

    Clarifies current rural growth, links it to monsoon, and indicates potential improvement in Q2, while noting scooterization is also rising in rural areas.

    asked by Binay Singh

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q1 FY26 Performance Driven by Volume Growth and Margin Expansion

    TVS Motor Company achieved its highest-ever revenue of ₹10,081 crores in Q1 FY26, marking a 20% year-on-year growth compared to ₹8,376 crores last year. Operating EBITDA increased by 32% to ₹1,263 crores from ₹960 crores, with the operating EBITDA margin expanding by 100 basis points to 12.5%. Profit after tax also grew significantly by 35% to ₹779 crores from ₹577 crores, reflecting sustained growth above the industry average.

    02

    Robust EV and Three-Wheeler Sales Outperform Market

    The company's EV two-wheeler sales surged by 35% year-on-year, reaching 70,000 units in Q1 FY26, up from 52,000 units last year, with revenue around ₹1,000 crores. Total three-wheeler sales also saw a substantial 46% growth, totaling 45,000 units compared to 31,000 units last year. While domestic ICE two-wheeler sales grew by 8%, the international two-wheeler market experienced a 40% growth, significantly outpacing the industry's 23% growth.

    03

    Strategic Investments in Norton and EV Portfolio

    TVS Motor is in the final stages of product preparation for its Norton brand, with multiple new products expected to launch in Q3 and Q4 of FY26, and in Europe by Q1 FY27. The company plans a total investment of approximately ₹2,000 crores for FY26, with capex estimated between ₹1,600-1,700 crores, primarily for new product development and marketing. These investments are aimed at strengthening its premium and EV offerings, with Norton representing about 40% of the TVS Singapore investment of ₹5,100 crores as of March '25.

    04

    Addressing EV Magnet Supply Chain Challenges

    Management acknowledged ongoing challenges with the availability of rare earth magnets for EV production. In the short term, the company is managing with existing stocks, resizing higher-sized magnets, and exploring alternate strategies to maintain daily production. For the medium to long term, TVS is working on HRE-free, ferrite-based, and magnet-free technologies, alongside exploring alternate sourcing countries to build a more resilient supply chain.

    05

    TVS Credit Sustains Strong Growth

    TVS Credit, the company's financing arm, reported a 30% growth in PBT, reaching ₹243 crores in Q1 FY26, up from ₹187 crores last year, with its book size expanding to ₹26,900 crores. The company disbursed loans to over 1.6 million new customers, expanding its total customer base to over 2 crores. This growth is driven by a focus on risk-calibrated expansion across product categories and enhanced customer experience.

    06

    Outlook for Domestic Market and Regulatory Benefits

    The company anticipates moderate growth in the domestic ICE business for Q2 FY26 (July, August, September), supported by an early monsoon and improved rural sentiment. Additionally, TVS expects to start accruing PLI benefits for its EV three-wheelers from the next quarter (Q2 FY26), which will contribute to the segment's profitability. Discussions are also ongoing regarding ABS norms, with management prioritizing rider safety.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.