TVS Motor Q1 net drops 13% to Rs 51 crore

Despite sluggish market conditions, TVS Motor says investments in product development will continue as planned.

At the beginning of the year, the company had planned to invest Rs 100-125 crore on product development and R&D.

“We are not talking about investments for capacity addition. We are talking about investments in products which will continue according to schedule,” said CFO, S.G. Murali.

Last year, TVS Motor expanded production capacity to 3 million units across its plants in Hosur, Mysore and Himachal. With adequate capacity across all units, the focus this year will be on product development and research, said Murali.

“The macro-economic conditions may be down but we have to upgrade our product portfolio,” he said, adding that short-term blips cannot lead the company into “mortgaging the future.”

TVS Motor’s overall market share in the two-wheeler segment has been slipping in recent times, behind Hero Honda and Bajaj. It aims to gain share with new launches this year. The company plans to launch an executive segment motorcycle next month, said Murali.

A scooter is also scheduled for launch later this year.

Net profit falls

TVS Motor’s first quarter net profit dropped 13 per cent to Rs 51 crore, on the back of increase in brand investments.

The company’s latest monthly scorecard, too, has been disappointing. Total sales in July this year dipped 15 per cent to 161,255 units, from 189,962 units in July last year.


Exports, too, have taken a hit. The company’s exports last month declined 33 per cent to 19,182 units.

The company’s share price was up 1.58 per cent at Rs 38.50 on Wednesday on the BSE.

(This article was published on August 1, 2012)
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