TVS motors has received an IND AAA/Stable credit rating from India Ratings and Research Private Limited for its upcoming ₹500 crore non-convertible debentures (NCDs). The rating agency announced this assignment on 4th March 2026, highlighting the company's strong market position and robust financial profile in the Indian automotive sector.

Rating Details and Instrument Specifications

The rating assignment covers non-convertible debentures worth ₹500 crore that are yet to be issued by the company. India Ratings has assigned the highest investment grade rating of IND AAA with a stable outlook, indicating extremely strong capacity for timely payment of financial commitments.

Strong Market Position Across Segments

TVS Motor has established itself as a leading player in India's two-wheeler industry with significant market presence across multiple segments. The company holds the position of second-largest player in the domestic scooter segment and has emerged as the largest player in e-scooters. As of 10MFY26, TVS Motor's market share in domestic scooter sales reached 28.50%, representing a substantial increase from 18% in FY20.

The company's market dominance extends to motorcycles, where it holds an 11% market share as of 10MFY26, compared to 6.70% in FY20. TVS Motor has become the market leader in the 150-250 CC motorcycles category and maintains the only presence in the mopeds segment in India. In the rapidly growing electric vehicle space, the company leads the e-scooter market with over 23% market share as of 9MFY26, significantly up from 11.40% in FY23.

Financial Performance and Growth Trajectory

TVS Motor's financial performance demonstrates consistent growth and improving profitability metrics. The company's consolidated revenue (excluding financing arm) expanded at a CAGR of 17% during FY20-FY25, while standalone revenue and volumes grew at CAGR of 17.20% and 7.80% respectively over the same period.

The company's standalone EBITDA margins have shown consistent improvement, hovering above 12% in FY25-9MFY26 compared to 6%-8% until FY20. This improvement stems from premiumisation of the product portfolio, cost-rationalisation programmes, and operating leverage achieved through increasing volumes.

Diversified Business Portfolio and Innovation Focus

TVS Motor operates a diversified mobility portfolio spanning scooters, motorcycles, mopeds, and three-wheelers. The company has successfully premiumised its product mix, with 73% of overall volumes derived from motorcycles above 110 CC in FY25, compared to 53% in FY20. Strong brands including Jupiter and Ntorq in scooters, and Apache series and Raider in motorcycles support this diversified approach.

The company maintains significant export operations with presence in over 60 countries, ranking among the top two 2W and 3W exporters in India. During FY24-9MFY26, exports contributed 24%-27% of standalone revenue, while electric vehicles accounted for 9%-12% of revenues, demonstrating successful diversification strategies.

Credit Metrics and Financial Strength

TVS Motor maintains strong credit metrics characterized by low financial leverage and high coverage ratios. The consolidated gross interest coverage (excluding financing arm) improved to 16.20x in FY25 from 11.60x in FY24. Net adjusted leverage remained below 1.0x in both FY24 and FY25, indicating conservative debt management.

The company generated healthy cash flow from operations of ₹22.70 billion in FY25, compared to ₹13.60 billion in FY24. However, free cash flow remained negative at ₹6.50 billion in FY25 due to substantial capex investments of ₹24.40 billion focused on electric platform development and capacity expansion.

Rating Outlook and Risk Factors

India Ratings expects TVS Motor's consolidated margins to improve to 10%-10.50% during FY26-FY27, supported by continued product premiumisation and reduced losses from overseas subsidiaries and e-mobility business. The rating agency notes that while the company faces intense competition from other OEMs and macroeconomic headwinds, its strong brand value and supply chain bargaining power provide resilience.

Key risk factors include the inherent cyclicality of the automotive industry, intense competition in both conventional and electric vehicle segments, and ongoing losses from overseas subsidiaries that impact consolidated profitability. The company's overseas investments, totaling around ₹86.24 billion till FY25, represent 87% of standalone net worth, with plans for additional investments of ₹29 billion in FY26.

TVS Motor Company has reported robust sales performance for February, with total unit sales reaching 529,308 units, representing a significant 31% growth over the previous year. The company's performance exceeded analyst estimates of 510,500 units, demonstrating strong operational momentum across multiple business segments and achieving record international sales.

Overall Sales Performance

The February sales data reveals substantial growth momentum across the company's portfolio. TVS Motor Company achieved notable year-over-year expansion, with current sales significantly outpacing the previous year's performance and surpassing market expectations.

Segment-Wise Performance Analysis

The domestic two-wheeler segment demonstrated strong performance with 32% growth, increasing from 276,072 units to 365,471 units. Within the two-wheeler category, motorcycles registered 25% growth with sales rising from 192,960 units to 241,282 units, while scooters showed even stronger momentum with 34% growth from 164,415 units to 219,895 units.

International Business Achieves Record Performance

TVS Motor Company's international business recorded its highest ever monthly sales of 1.58 lakh units, with total exports growing 27% from 124,993 units to 158,268 units. Two-wheeler exports specifically contributed 142,391 units, representing a 23% increase from 115,817 units in the previous year.

Electric Vehicle Segment Shows Strong Growth

The electric vehicle segment demonstrated exceptional performance with 60% growth, increasing from 24,017 units to 38,386 units. This substantial growth reflects the company's successful expansion in the sustainable mobility segment and growing market acceptance of electric two-wheelers. The three-wheeler segment also showed remarkable performance with 77% growth, rising from 12,087 units to 21,446 units, indicating strong demand in the commercial vehicle segment.