TVS Motors has kicked off the fiscal year with a stellar performance, achieving its highest-ever quarterly revenue and surpassing the ₹10,000 crore milestone for the first time. The company reported a robust 20% year-on-year growth in revenue, reaching ₹10,081.00 crores in Q1, compared to ₹8,376.00 crores in the same quarter last year.

Strong Financial Performance

The company's profit after tax (PAT) saw a significant increase of 35%, rising to ₹779.00 crores from ₹577.00 crores in the corresponding quarter of the previous year. Operating EBITDA grew by 32% to ₹1,263.00 crores, with the EBITDA margin improving to 12.5% from 11.5% in the previous year.

Sales Volume Growth

TVS Motors witnessed a 17% increase in overall sales volume during the quarter. The two-wheeler segment showed mixed performance, with domestic ICE (Internal Combustion Engine) sales growing by 8%, while international sales surged by 40%. The company's electric two-wheeler sales increased by 35% to 70,000 units, and three-wheeler sales jumped by 46% to 45,000 units.

Electric Vehicle (EV) Segment

The EV segment continues to be a strong focus area for TVS Motors. The company's flagship electric scooter, TVS iQube, has surpassed 6 lakh unit sales, maintaining its market leadership in India. TVS has expanded its iQube portfolio to include six variants, offering a wide range of options for EV customers.

International Market Performance

TVS Motors posted its highest-ever quarterly exports of 3.52 lakh units, driven by strong growth in major markets. The company witnessed a 40% growth in international sales, outpacing the industry growth of 23%. Markets in Africa are showing signs of stability, while the LATAM region continues to present growth opportunities for the company.

Three-Wheeler and EV Three-Wheeler Segment

The company's three-wheeler segment, including both ICE and EV models, showed robust growth. The recently launched TVS King EV Max, an electric three-wheeler, has received positive customer response. TVS Motors is expanding its three-wheeler network and currently covers about 70% of the market.

TVS Credit Services Performance

TVS Credit, the company's financial services subsidiary, reported a 30% growth in profit before tax (PBT) to ₹243.00 crores. The book size of TVS Credit has reached ₹26,900.00 crores, with the company focusing on risk-calibrated growth across product categories.

Future Outlook

Despite short-term challenges in the EV segment, particularly related to the supply of rare earth magnets, TVS Motors remains optimistic about its growth prospects. The company is exploring alternatives, including ferrite-based and magnet-free solutions, to ensure a resilient supply chain for its EV production.

K. N. Radhakrishnan, Director and Chief Executive Officer of TVS Motors, expressed confidence in the company's future performance, stating, "Our unwavering focus on customers, quality, and new product development, coupled with our strong brand portfolio, positions us well to continue growing ahead of the industry in both domestic and international markets."

As TVS Motors enters the festive season, it anticipates strong growth in both domestic and international markets across ICE and EV segments, leveraging its diverse product range and customer-centric approach.

TVS Motor Company Limited , a leading Indian two-wheeler and three-wheeler manufacturer, has made significant moves in both its international expansion and shareholder rewards strategy.

Killwatt GmbH Acquisition Completed

TVS Motor (Singapore) Pte Ltd, a subsidiary of TVS Motor Company Limited, has finalized its acquisition of an additional 9.72% stake in Killwatt GmbH. The company paid the final installment of EUR 0.40 million, completing the total consideration of EUR 4.00 million for this stake. This payment was made following Killwatt GmbH's achievement of a pre-agreed milestone.

The acquisition process was carried out in multiple phases:

• Initial payment: EUR 2.00 million
• Second payment: EUR 1.60 million
• Final installment: EUR 0.40 million

This strategic move is expected to strengthen TVS Motor's position in the European market and potentially enhance its capabilities in electric vehicle technology.

Bonus Preference Shares Announced

In a separate development, TVS Motor Company has received approval from the National Company Law Tribunal (NCLT) for a scheme of arrangement to issue bonus preference shares to its equity shareholders. Key details of the scheme include:

The company plans to utilize its general reserves and retained earnings for this issuance. As of December 31, 2023, TVS Motor's free reserves and retained earnings stood at INR 7,574.00 crore, which is sufficient to cover the redemption obligation of the bonus preference shares.

Rationale for Bonus Preference Shares

TVS Motor Company stated that this move aims to reward shareholders by optimally utilizing surplus reserves. The company believes it has built substantial surplus reserves over the years, which are well above its current and likely future business needs. By issuing these preference shares, TVS Motor intends to distribute funds to shareholders while maintaining flexibility in managing its liquidity.

Impact on Shareholders and Debenture Holders

The scheme is designed to benefit equity shareholders without affecting the company's existing non-convertible debenture holders. The preference shares will rank subservient to the non-convertible debentures in the priority of claims.

TVS Motor Company's shares are listed on the BSE Limited and National Stock Exchange of India Limited. The company has received observation letters from both exchanges regarding the scheme.

Investors and stakeholders should note that this scheme is subject to necessary statutory and regulatory approvals. The company will be required to file revised Memorandum and Articles of Association with the Registrar of Companies and make any requisite payments for the enhancement of its Authorized Capital.

As TVS Motor Company moves forward with these strategic decisions, it demonstrates a balance between international growth and shareholder value creation. The completion of the Killwatt GmbH acquisition and the approval of the bonus preference share scheme mark significant milestones for the company.