TVS Motor Co.

TVS Motor Company reported a robust Q2 FY26, with operating revenue growing by 29% to INR 11,905 crores, up from INR 9,228 crores in the same period last year. Operating EBITDA saw a significant increase of 40% to INR 1,509 crores, leading to a 100 basis points expansion in the operating EBITDA margin to 12.7%. Profit after tax (PAT) also demonstrated strong growth, rising by 37% to INR 906 crores compared to INR 663 crores in Q2 last year.

The company's sales volume grew by 23% overall. Domestic ICE two-wheeler sales outpaced the industry, growing by 21% against an 8% industry growth. International market two-wheeler sales also performed strongly, increasing by 31% compared to a 26% industry growth. Three-wheeler sales surged by 41% to 53,000 units, up from 38,000 units last year. EV two-wheeler sales grew by 7% to 80,000 units, despite challenges in magnet availability.

TVS Motor launched several new products, including the TVS Orbiter, an urban EV commute with segment-first features like 158 km IDC range and a competitive price of INR 99,900. The company also introduced the TVS King Kargo HD EV for cargo mobility, building on the success of the TVS King EV. Additionally, the TVS Ntorq 150, India's quickest hyper-sport scooter, and the adventure rally tourer Apache RTX were launched, further strengthening the product portfolio across segments.

International business achieved its highest-ever quarterly sales, crossing 400,000 units. Growth was strong in Africa and LatAm regions, where TVS is expanding its product range and market penetration. The company is confident of growing faster than the industry in these regions. In Asia, markets like Sri Lanka and Nepal are growing, and network strengthening is underway in Bangladesh. TVS is also setting up a Dubai office to deepen customer understanding and drive international growth.

The operating EBITDA margin improved by 100 basis points to 12.7%. Management attributed this to strong top-line growth, effective cost reduction efforts, strategic price increases, and a favorable product mix. While commodity costs increased by 0.6% in Q2, the company expects Q3 increases to be less severe. Investments in R&D and marketing for new launches, totaling approximately INR 85-90 crores, are considered future investments.

TVS Credit achieved significant growth in H1 FY26, driven by GST 2.0 implementation and increased consumer product sales. The company disbursed loans to over 25 lakh new customers, expanding its total customer base to over 2.13 crores. The book size reached INR 27,807 crores, and PBT for the quarter grew by 28% to INR 277 crores, demonstrating strong financial performance and risk-calibrated growth.

TVS Motor invested approximately INR 550 crores during the quarter, primarily directed towards the development of Norton e-bikes and establishing a strategic Dubai office. These investments are aimed at enhancing product offerings, expanding into premium segments, and strengthening international market presence. The company emphasizes continuous investment in technology, brand building, and new product development to ensure future growth and customer delight.

The recent GST rate reduction is expected to significantly benefit the industry, particularly the entry-level segment, with potential savings of around INR 7,000 for moped customers. Management anticipates a positive multiplier effect across various goods and industries, accelerating consumption. The initial market sentiment post-GST reduction and during the festive season is very positive, with expectations for continued growth in Q3 and Q4, especially in rural markets.