TVS Motor hopes to post better performance and increase share in the coming quarters. For the quarter ended September, the firm’s net profit fell 41 per cent to Rs 45 crore as against Rs 77 crore in the same period previous year. Its profit from operations before other income, finance cost and other items also fell 37 per cent to Rs 69 crore from Rs 109 crore. K N Radhakrishnan told G Balachandar that company’s festival sales so far have been encouraging. Excerpts:
What were the major reasons for drop in margins and profit in Q2?
The overall economic scenario has been weak. Industry in Q2 of 2012-13 declined by five per cent compared with growth of 19 per cent in Q2 of last year and nine per cent growth of Q1 of the current year. Lower sales during the second quarter has resulted in lower margins and profit. Additionally, the company has invested significantly in building its various brands.
When will the formal roll out of Phoenix happen?
As mentioned during the launch, we will start supplies of TVS Phoenix from November onwards and by December-end TVS Phoenix should be available across the country.
Do you see some festive boost to your sales?
Festival sales have been encouraging. We have grown around 10 per cent when compared strictly with the previous year’s festival season. However, we need to watch how things will pan out during Dantheras and Diwali.
Overall, how do you see the second half for your company and two-wheeler industry?
We expect the second half of the financial year to be better given that we will have a complete product portfolio with the introduction of TVS Phoenix, which will complement our existing brands. The industry is expected to grow about five-six per cent as against the earlier estimate of 9–11 per cent. This is mainly due to inflationary pressures, high interest rate and rising fuel prices. With a complete product portfolio, we expect to gain market share in the second half.
