TVS Motor profit zooms 123% on sales, new launches

After a challenging period, it is now time for TVS Motor to shift to top gear. Driven by volume growth, the country’s third largest two-wheeler maker has notched up a 123% growth in net profit to Rs 40.38 crore for the first quarter of the current fiscal from the year-ago Rs 18.12 crore. The company’s revenue grew 41% to Rs 1,393 crore from Rs 989 crore. This shows the company is heading towards a robust growth.

To prove it further, the company has notched up a 31% growth in cumulative two wheeler sales (from April to June 2010) with 4,56,041 units in the current fiscal as against 3,47,141 units in the corresponding period of the previous year, thanks to the new launches and 66% growth in exports.

If sales of the first quarter is any indication, the company is set to achieve the 2-million target in the whole fiscal. The revival in demand will also help its Indonesian operations to break even in the current financial year. The company had invested around Rs 350 crore into Indonesian operations and has been making losses.

While the analysts and industry trackers are little skeptical over the projection given by TVS Motor, the company, however, is confident of achieving the same as its two new launches —Jive and Wego—a 110 cc clutch-free motorcycle and another wide-bodied scooter.

The company believes that factors such as surge in demand, a few new launches (entry level products at the motorcycle segment), spreading of Jive and Wego sales across the country, launching of captive financing, fresh tie-ups with banks and institutions and a strong revival in the export markets will augur well for the company going forward and will help achieving the desired sales target.

Says Venu Srinivasan, chairman & managing director, TVS Motor, “We need to wait for a few more months before we comment on anything. What I have to say at this point of time is to consolidate our existing products portfolio and grow as per our plans.”