Two-wheeler major TVS Motor Company saw its net profit drop by 13.5% to Rs 51 crore in the first quarter, down from Rs 59 crore in the year-ago period.
Compared to the quarter ended March 2012, profit after tax is down nearly 11%. TVS clocked Rs 57.23 crore in Q4 of last fiscal.
Profits are lower due to "significant increase in brand investments across key brands including TVS Wego, TVS StaR City and TVS Sport along with the recently introduced Apache RTR and Scooty Pep," the company said in a statement on Friday.
The company's revenue, however, increased 4.24% from Rs 1,746 crore last Q1 to Rs 1,820 crore for the quarter ended June 2012. Profit before tax was down 15% at Rs 66 crore against Rs 78 crore clocked last fiscal.
Analysts had expected TVS' net profits to shrink much more. So, the stock gained in the stock market. Auto analysts said part of the reason why the street expected worse from TVS was because of its Indonesian venture which has not been doing too well. PT TVS Motor Company Indonesia saw two wheeler sales drop 14% this quarter to 6,041 units down from 7,035 units sold last Q1.
Overall domestic sales were also flat given the general sluggishness that has crept into the two-wheeler industry. TVS saw its overall sales remain flat for the quarter at 5.47 lakh units and nearly all the segments recorded various levels of degrowth.
Motorcycles clocked sales of 2.06 lakh units, down 8% compared to the 2.24 lakh units sold last Q1. Scooter sales were flat at 1.20 lakh units compared to 1.19 lakh units last year. Two wheeler exports too saw a nearly 22% dip - down to 0.61 lakh units in the current quarter against 0.78 lakh units last Q1.
