TVS Motor Company Limited — Q3 FY26 earnings call

Call held 28 Jan 2026

Management summary

TVS Motor delivered a blockbuster Q3 FY26 with record-breaking performance across all metrics. The company significantly outperformed the industry in both domestic and international markets. GST reduction, strong festive demand, and premiumization drove exceptional growth. EBITDA margin expanded 120bps YoY to 13.1%. Management remains highly confident about Q4 outlook and long-term 8-9% industry CAGR.

Highlights

  • Highest ever quarterly sales, revenue and profits

  • Revenue grew 37% YoY to INR 12,476 crores

  • Operating EBITDA grew 51% YoY to INR 1,634 crores at 13.1% margin

  • Total 2-wheeler ICE sales grew 25% vs industry growth of 17%

  • EV 2-wheeler sales grew 40% YoY crossing 1 lakh units

  • 3-wheeler sales more than doubled to 60,000 units

  • PBT grew 57% to INR 1,315 crores

  • TVS Credit book size at INR 29,678 crores, PBT grew 21%

Key financials

2 periods

Headline

  • Revenue
    ₹12,476 Cr
    YoY +37%
  • Operating EBITDA
    ₹1,634 Cr
    YoY +51%
  • EBITDA Margin
    13.1%
  • PBT (before exceptional)
    ₹1,315 Cr
    YoY +57%
  • PAT
    ₹940 Cr
    YoY +52%
  • International Revenue
    ₹2,909 Cr
  • Spare Parts Revenue
    ₹1,183 Cr
  • TVS Credit Book Size
    ₹29,678 Cr
    YoY +9%
  • TVS Credit PBT
    ₹390 Cr
    YoY +21%
  • PLI Benefit as % of Revenue
    0.7%

9M

  • Revenue
    ₹34,463 Cr
    YoY +29%
  • PBT
    ₹3,594 Cr
    YoY +43%
  • PAT
    ₹2,625 Cr
    YoY +41%

What they filed

Q1 FY27: revenue up 33.5%, net profit up 64.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue11,302 11,035 11,542 12,210 14,051 +24%14,756 +34%15,053 +30%16,296 +33%
EBITDA1,624 1,633 1,904 1,803 2,110 +30%2,267 +39%2,172 +14%2,343 +30%
Net profit588 609 698 643 833 +42%891 +46%820 +17%1,058 +65%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Industry

  • Q4 FY26 2W industry growth Industry · Q4 FY26 · High confidence 15%+
    Q4 also, you will see anything upwards of 15%

    — K. N. Radhakrishnan

  • FY26 full year 2W industry growth Industry · FY26 · High confidence ~9%
    year as a whole, you will see somewhere around 9% growth

    — K. N. Radhakrishnan

  • Long-term 2W industry CAGR Industry · Long-term · High confidence 8-9%
    I'm a firm believer that 8% to 9% as a CAGR, you can look at on a long-term basis

    — K. N. Radhakrishnan

Capex

  • FY26 Capex Capex · FY26 · High confidence ~1700 crores
    The capex will be around INR1700 crores or slightly around that

    — K. N. Radhakrishnan

Investment

  • FY26 Total Investments Investment · FY26 · High confidence ~2900 crores
    investments around INR2,900 crores overall

    — K. N. Radhakrishnan

EV

  • Orbiter monthly production EV · Near-term · Medium confidence 10000+ units/month
    First, we'll cross that 10,000 numbers per month

    — K. N. Radhakrishnan

Products

  • Norton launch Products · CY2026 · High confidence Products to hit market in 2026
    these products are going to hit the market in 2026 this year

    — K. N. Radhakrishnan

Risks & concerns

  • Commodity inflation in precious metals, aluminum, copper, zinc

    medium

    Platinum, palladium, rhodium prices increased; BS-VI has higher content requirements

    Analyst acknowledged but manageable; total impact ~0.4%, offset by scale and price hikes

  • EV magnet supply constraints

    medium

    Affected iQube and Orbiter production; now easing

    Management recovering; full supplies expected within a month

  • Norton investments dragging on profitability

    medium

    INR290 crores invested in Norton this quarter; brand building and pre-marketing costs

    Analyst investments in right direction; 2026 is critical launch year

  • Europe market challenges

    low

    European market not growing; recovery timeline uncertain

    Management may take a few more quarters for performance to improve

  • Safeguard duties on steel

    low

    Reintroduction of safeguard duties could add to input costs

    Analyst part of overall commodity basket; managed through balanced approach

Q&A highlights

6 direct
Industry growth sustainability into FY27 Direct
first half of next year is also going to be very good because the benefits will come into the industry

GST base effect ensures strong H1 FY27; long-term 8-9% CAGR reiterated

Asked by Gunjan (BoA)

Commodity inflation impact Direct
total may be about 0.4% at best... it's a balanced journey of scale plus cost reduction plus product mix plus small price increases

Commodity headwind manageable at 0.4%, offset by 0.3% price hike and scale benefits

Asked by Chandramouli (Goldman Sachs)

Norton investments and losses Direct
Last quarter INR240 crores and this quarter about INR290 crores Norton investment

Norton investment trajectory is clear; 2026 is a critical year for product launches

Asked by Gunjan (BoA)

EV supply constraints and magnet availability Direct
by another month, you will see full supplies of EV also into the market

Magnet shortage was a real constraint on EV volumes; now recovering

Asked by K. N. Radhakrishnan (proactive)

Mexico tariff impact Direct
volumes are low... we are also trying to increase our local content. It is not going to put a huge impact

Mexico exposure is very small; localization being pursued as mitigation

Asked by Sonal Gupta (HSBC MF)

Currency hedging Direct
current quarter realization is around INR88... we cover the next 12 weeks

INR depreciation benefits will flow through gradually with 12-week hedging policy

Asked by Kapil Singh (Nomura)

2 min read 5 chapters

Detailed narrative

Record Quarter Driven by GST Tailwind and Premiumization

TVS Motor delivered its highest ever quarterly performance with revenue of INR 12,476 crores (+37% YoY), EBITDA of INR 1,634 crores (+51% YoY) at 13.1% margin, and PBT of INR 1,315 crores (+57% YoY). The GST reduction in September 2025 catalyzed demand across segments. Scooters outperformed with the category approaching 40% share of total 2W industry. Premium and super-premium segments grew faster than the industry.

EV Business Scaling Despite Supply Hiccups

EV 2-wheeler sales grew 40% YoY to cross 1 lakh units. However, magnet availability issues constrained production of iQube and the newly launched Orbiter. Management expects full EV supply recovery within a month. iQube production runs at 30-32K/month, Orbiter approaching 10K/month. EV 3-wheeler (TVS King EV) volumes at ~8,500 units/quarter. PLI benefits contribute 0.7% of revenue. EV is contribution-positive and improving quarterly.

International Markets Strong; Africa and LatAm Leading

International revenue was INR 2,909 crores. Exports grew 35% vs industry 23%. Africa has recovered strongly after a bad prior year. LatAm continues to grow. Sri Lanka is back as a major scooter market with Jupiter as a key product. Europe remains weak and may take a few more quarters. Mexico tariff impact is minimal given low volumes and localization efforts.

TVS Credit Services and Subsidiary Investments

TVS Credit book size at INR 29,678 crores (+9% YoY) with PBT of INR 390 crores (+21% YoY). Disbursed loans to 41 lakh new customers in 9M, total customer base ~2.3 crores. Investment guidance for FY26 revised up to INR 2,900 crores from INR 2,000 crores, driven by Norton (INR 290cr this quarter), TVS Credit (INR 200cr additional), ION PT TVS project (~INR 100cr).

Norton Approaching Commercial Launch

Norton products unveiled at EICMA 2025 Milan — new Manx and Atlas families targeting super-premium luxury motorcycle segment. Products to hit markets in 2026. India launch also planned with differentiated strategy. Pre-marketing and EICMA costs of INR 60-70 crores incremental this quarter. This is described as a very important year for Norton.

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