Chennai Based TVS Motor Bikes Company earned a 20.7% increase in profit on Rs 255.01 crore compared to Rs 211.31 crore in the September quarter in last year. In the midst of weak demand, the Street expected a double-digit fall in revenue and profit.
TVS Motors is the third largest motorcycle company in India with revenue of about 20000 crores in 2008-09. This company has annual sales of 3 million units and an annual capacity of over 4 million vehicles.
This is in line with a beneficial order from the Court of Appeal for Customs, Excise and Service Tax. Ebitda margin was up by 21 basis points (bps) year-on-year and quarter-on-quarter by 82 bps to 8.8%, driven by cost reduction programs product mix and higher export contribution.
The quarter’s profit before tax (PBT) was Rs 310.3 crore, a year earlier versus Rs 306.2 crore. The quarter’s PBT includes an exceptional Rs 76 crore benefit for the reversal of the earlier-year NCCD provision for the Himachal Pradesh factory.
President of TVS Bikes is K N Radhakrishnan, chief executive, and an additional full-time director. He said the overall focus of the business on building brands, on one hand, the export market and cost reduction measures helped and would continue to do so.
The company also increased prices in the second quarter by 0.3 percent and in the first quarter by 0.1 percent. Following the slowdown, TVS said its CAPEX would be around Rs 600 crore, while for the economic year investments would be around Rs 100-120 crore.
Radhakrishnan is confident that thanks to a good monsoon, Diwali will be better and that the mystery about the tax on goods and services has settled.
“There is a positive sentiment, especially in rural markets, which is leading to higher walk-ins,” said Radhakrishnan, hoping that Q4 and Q1 would be much better.