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TVS Motor Company has chalked out a capex of about ₹500 crore for the current fiscal.
“The capex will be spent across our three manufacturing locations – Hosur, Mysore and Pantnagar (Himachal). Depending on the industry growth and new product launches, we will appropriately boost the production capacity,” S G Murali, Chief Financial Officer, TVS Motor Company, told BusinessLine .
He said the company was hoping to record twice the industry growth during the current fiscal.
The company believes the forecasts of a normal monsoon augurs well for the industry.
“We are hoping that the growth will be back from this quarter, which is also a period of marriage season. Though there were some early purchases during the last two days of March due to Supreme Court banning sales of BS-III vehicles from April 1, we see the demand coming back in the next two months,” he added.
TVS Motor expects the scooter segment to sustain the growth momentum and is of the view that scooters will outgrow motorcycles for few more years.
Discussing headwinds of higher commodity prices, Murali said: “We are watching the position closely and if the commodity price situation warrants one more price increase we will decide in May or June,” he added.
In 2016-17, the company’s market share was 14 per cent and it aims to increase to close to 16 per cent during this fiscal.
It reported 7 per cent drop in its net profit at ₹127 crore for the quarter ended March 31, 2017, when compared with ₹136 crore in a year-ago period, due to the effects of demonetisation and discounts offered for sale of BS-III vehicles.
Operating profit was lower at ₹134 crore (₹157 crore). Revenues grew marginally to ₹3,076 crore(₹3,052 crore).
“The profit for the quarter is net of one-time provision of ₹57 crore of discounts towards such BS-III products sold by the dealers in March 2017,” the company said.
For the year ended March 31, 2017, net profit grew by 14 per cent at ₹558 crore compared with ₹489 crore in the previous year. Total revenue increased by 9.6 per cent to ₹13,363 crore (₹12,195 crore). Profit before tax grew by 11 per cent at ₹699 crore (₹629 crore).
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