TVS looking to ride on lower costs for better and sustained growth

At a time when volumes are under pressure, TVS Motor is looking at increasing its margin to double-digit levels from 8.8 per cent it reported in the third quarter of financial year 2019-20 (Q3FY20).

The company’s gross margins hit a 13-quarter high of 27.8 per cent in Q3FY20. This came on the back of lower commodity prices, reduction in material costs (60-70 basis points quarter-on-quarter), cost-cutting, and higher localisation. However, this was partially offset by higher other expenses at 13.3 per cent.

To achieve its target, the firm has put in place a series of initiatives like reducing import content, increasing exports,