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Our Bureau

Chennai, Oct. 24 TVS Motor has reported a net profit of Rs 11.92 crore for the July-September quarter, which is 52 per cent lower than the Rs 24.83 crore the company made in the corresponding quarter of last year.

Two reasons — turnover was down 23.5 per cent to Rs 823 crore due to “slowdown” in the motorcycles industry and there was an exceptional item of expenditure of Rs 10.20 crore. But for the ‘net exceptional item of expenditure’, net profit would have been only slightly lower.

TVS Motor has not clarified the nature of the exceptional item, nor were company officials available to explain. In a footnote to the statement of results, the company has said that the exceptional item included a gain of Rs 29.34 crore on restatement of external commercial borrowings and Rs 19.14 crore of accelerated amortisation of deferred product launch expenses. What caused the ‘net exceptional expenditure’ of Rs 10.20 crore is not clear.

Earnings per share for the quarter fell to Rs 50 paise for the Re 1 share, compared with Rs 1.05 for the corresponding quarter of last year. Turnover was down because TVS Motor sold fewer motorcycles, as the vehicles sales are credit driven and cost of credit was higher during the quarter. Motorcycle sales in the second quarter was lower at 144,682 units when compared to 258,321 units over the previous period. Scooter sales however, went up from 73,364 units to 75,685 units during the quarter.

The company promises to address the situation by adding more products in the premium and executive segments to counterweight the ‘entry level’ segment, which is more finance-related.In the first half of the current year, TVS Motor achieved a turnover of Rs 1,642 crore (Rs 2,028 crore), including ‘other income’ of Rs 36 crore (Rs 28 crore). It made a net profit of Rs 19.46 crore (Rs 46.09 crore) during the period.

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