TVS Motor net up 20% at Rs 213 crore

Firm plans to invest around Rs 600 cr on capex, R&D

TVS Motor Company posted a 20.2 per cent rise in net profit at Rs 213.16 crore for the quarter ended September 30, compared to Rs 177.39 crore in the year-ago period. 

Revenue rose to Rs 4,097.99 crore, against Rs 3,465.69 crore in the corresponding period a year earlier.

The company is also planning to invest around Rs 600 crore to expand its manufacturing capacity and investment in research and development (R&D). TVS Motor's Advisor S G Murali and the new chief financial officer K Gopala Desikan said that capacity will be increased to 4.5 million units from 3.5 million units per annum. TVS has manufacturing facilities in Tamil Nadu, Karnataka and in northern India.

They also said that part of the capex will be utilised to develop new products. 

While the company did not put a timeframe for its electric scooter, sources said a new electric Jupiter will be launched early 2018. Murali confirmed that TVS will launch a 310-cc vehicle, based on the BMW platform, by early 2018. 

TVS has a strategic partnership with BMW Motorrad to develop and manufacture sub-500 cc bikes for domestic and global markets. On an average, it exports 2,000-2,500 units for BMW. The BMW G310R is the first motorcycle manufactured and exported under the partnership.

Murali said the company plans to end the current financial year with a double-digit Ebitda, which during the September quarter was 8.6 per cent, compared to 8.1 per cent in the year-ago period. Growth in revenue, better product mix, and fixed cost percentage of sales coming down were among the key factors that helped TVS report better margins. Analysts believe TVS is on the path of achieving its target of 10 per cent by next year. "We will end the year with double-digit margin and continue to maintain the momentum for the whole of next year," said Murali.