TVSMOTOR - TVS Motor Company Ltd. Share Price

In the earnings call on May 13, 2026, management provided an optimistic outlook for FY '27, forecasting good single-digit growth in the domestic market, driven by strong demand for their product range, particularly in the EV and scooter segments. They anticipate growth momentum, especially for models like the Jupiter 110 and 125, and the EVs iQube and Orbiter.

Key forward-looking points include:

• Production Capacity Increase: The company plans to raise its production capacity by approximately 1.5 million units, targeting a total capacity of around 8.3 million units within the next 12 months.
• Revenue Performance: For FY '26, TVS surpassed previous records with a total revenue of INR 47,270 crores, representing a 30% year-on-year growth. Operating PBT increased by 40% to INR 4,975 crores.
• Cash Flow: The company generated an operating free cash flow of INR 3,805 crores, up 47% from the previous year.
• International Markets: Management noted that FY '27 will continue to see good performance in international markets, with strong demand expected across Africa, Asia, and Latin America.
• Investment Plans: The capex for FY '27 is projected at INR 3,500 crores, with reductions from the previous year's higher investment predominantly aimed at Norton and expansion of EV capacity.
• EV Growth: The EV two-wheeler segment is expected to gain traction, with sales for the year hitting approximately 3.7 lakh units, representing a 33% increase. The company also anticipates EV penetration in the overall market to increase, supported by the successful launch of the new TVS iQube S.
• Response to Challenges: Despite potential challenges from commodity inflation (estimated at 3-5% for FY '27) and ongoing geopolitical issues, TVS remains focused on maintaining cost efficiencies and leveraging its product mix to offset these pressures.

Overall, management expressed confidence in navigating current challenges while capitalizing on growth opportunities across various segments.

Questions and Answers from Earnings Call Transcript

1. Question by Kapil Singh, Nomura: "What kind of growth are you expecting for domestic and international markets for FY '27? Any specifics on motorcycles, ICE scooters, and EV scooters?"

   Answer: "We anticipate good single-digit growth for the industry this year. Our EV segment is doing exceptionally well, particularly with brands like iQube and Orbiter, while scooters, especially the Jupiter range, are also performing well. However, the economy category faces challenges due to rising inflation. We forecast our scooter share to exceed 40%, while international demand remains robust."

2. Question by Kapil Singh: "What commodity inflation are you expecting in Q1, and how much price hike have you taken?"

   Answer: "We expect commodity inflation of about 3% to 5% as a percentage of revenue. We've managed to offset 35% of the price increases by implementing our own price hikes. We're closely monitoring both domestic and international landscapes to strategize on potential further adjustments as needed."

3. Question by Chandramouli Muthiah, Goldman Sachs: "What is your current 2-wheeler and 3-wheeler production capacity, and what capacity expansion can we expect in the next 12-24 months?"

   Answer: "We aim to expand our capacity by 1.5 million units, increasing our total to around 8.3 million. This is crucial to meet demand, and we've initiated work on this expansion. We're also evaluating future capacity needs for 2028 and 2029 to stay ahead of industry growth."

4. Question by Gunjan Prithyani, Bank of America: "Could you elaborate on your cautious outlook for the next two quarters? Is it due to cost headwinds or supply disruptions?"

   Answer: "While we're confident about demand, the uncertainty lies in raw material availability and potential delays impacting supply chains. We've faced tier 2 disruptions but expect improvements. By the end of this month, we anticipate being able to meet demand more effectively."

5. Question by Gunjan Prithyani: "What were the investments made this quarter, and what is your fiscal '27 capex guidance?"

   Answer: "We invested about INR 2,400 crores for the year, with significant allocations towards Norton, totaling around INR 700 crores this quarter. For FY '27, our capex will likely reduce to around INR 3,500 crores, focusing on product development and capacity expansion."

6. Question by Yash Agrawal, Nirmal Bang Securities: "What is the strategic rationale behind the partnership with Hyundai for the electric 3-wheeler segment?"

   Answer: "Partnering with Hyundai leverages their design and R&D capabilities alongside our expertise in local markets. This collaboration aims to redefine 3-wheeler mobility. I'll share more specifics closer to the product launch."

7. Question by Raghu Nandhan, Nuvama Research: "Will you see higher export growth than domestic growth in FY '27?"

   Answer: "We expect substantial growth both domestically and internationally, possibly with international growth matching or exceeding domestic figures. Strong demand remains across international markets, particularly as we've invested in building our brand presence there."

Each response is designed to ensure clarity and comprehensiveness for stakeholders while keeping within our character limits.