TVS Motor zooms in Q3 but speed bumps lie ahead
Subscribe to enjoy similar stories. TVS Motor Company Ltd stock rose 9.7% after its Q3FY25 results, as margin hit record high of 11.9% in the quarter, mainly driven by lower commodity prices. Profitability is set to improve further as TVS expects to receive benefits from the government’s production-linked incentive (PLI) scheme from Q4FY25 onwards, which has led to earnings-per-share upgrades by some brokerages.
Volume improved 10% year-on-year to 1.21 million units but was flat sequentially. In the first nine months of FY25 (9MFY25) the two-wheeler retail market grew around 9%, led by rural India. The domestic two-wheeler industry is projected to see single-digit growth in FY25, but TVS expects to outperform with new products such as the well-received Jupiter 110cc.
Also read: Tata Motors had accounting, PLI save the day in Q3, leaving investors cold However, its loss of market share in motorcycles is discomforting. “For the first time in many years, TVS has underperformed the industry in FY25YTD. More importantly, TVS has underperformed in the 125cc segment, which has been its key growth driver in recent years," said a Motilal Oswal Financial Services report dated 28 January.
TVS’s market share in the domestic scooters segment improved 50 basis points (bps) year-on-year to 20.1% in 9MFY25, while its share of the domestic motorcycle market fell from 10.5% to 9.9% over the same period. TVS’s fortunes are also tied to the progress it makes on electric vehicles (EVs). Its market share in the EV scooter segment rose to 22.4% in Q3FY25 from 19.3% in Q2FY25, but with competition heating up and subsidies fading, margin pressure is set to rise.
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