TVS Motor Q2 Results: Profit Dips 23%, Revenue Up 6% As Sales Remain Muted
Signage seen at the PT TVS Motor Company Indonesia Factory in Karawang, near Jakarta, Indonesia. (Photographer: Dimas Ardian/Bloomberg News)

TVS Motor Q2 Results: Profit Dips 23%, Revenue Up 6% As Sales Remain Muted

TVS Motor Co. Ltd.’s quarterly profit fell as sales remained muted despite a revival in two-wheeler demand after India eased lockdown curbs.

Net profit of the two-wheeler maker dipped 23% year-on-year to Rs 196 crore in the three months ended September, according to an exchange filing. That compares with the Rs 179-crore estimate of analysts tracked by Bloomberg.

TVS Motor Q2 Results 2020-21: Key Highlights (YoY)

  • Revenue rose 6% to Rs 4,605 crore in the July-September quarter, compared with the Rs 4,672-crore estimate.
  • Earnings before interest, tax, depreciation and amortisation—a measure of a company’s operating profitability—rose 13% to Rs 430 crore.
  • Ebitda margin stood at 9.3% against 8.8% a year ago.

“Despite Covid-19 challenges, TVS Motor strengthened its supply chain during the September quarter,” the company said in a statement accompanying its quarterly results. “The production and sales improved consistently from July onwards.”

India’s automakers were grappling with the worst slowdown in more than two decades even before the pandemic. The lockdown forced companies to stall operations, leading to a washout in the initial months. Sales gradually picked up from June after the country restarted most activities to revive an economy that’s headed towards a rare annual contraction in more than four decades.

Automakers are now betting on a recovery during the festival season as they pushed inventory to dealers.

TVS Motor sold 3,27,692 units in September, a 4% year-on-year increase. Overall, sales in the reported quarter fell to 8.34 lakh units from 8.42 lakh units a year ago.

Financing remains a concern, indicating a complete recovery of the industry is still some time away. Bajaj Auto Ltd., which reported a decline in net profit and revenue in the reported quarter, said financing is yet to return to pre-Covid levels, and is more forthcoming in premium vehicles compared to commuters. Hero MotoCorp Ltd., India's largest two-wheeler maker, however, reported a rise in quarterly profit and revenue.

On Thursday, TVS Motor shares fell 1.05% to Rs 422.25 apiece on the BSE while the benchmark Sensex ended the day 0.43% lower at 39,749.85 points. The quarterly results were declared after market hours.

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