TVS Motor Company's net profit for the third quarter this fiscal was nearly flat at Rs 56.53 crore (Rs 55.75 crore in the corresponding quarter last year), while net sales grew a modest 7 per cent to Rs 1,732 crore.
The company attributed this to a leaner inventory this quarter. According to Mr S.G. Murali, Executive Vice-President (Finance) and CFO, post the festival period the company did not want to build up stock.
“With a couple of product refresh planned in February and March, we did not want old stockpiling. Besides, the December quarter is generally a quieter period after the festival billing.”
Total two-wheeler sales was 5.19 lakh units in the quarter ended December 31, 2011 compared with 5.18 lakh units in the corresponding period last year. Scooter sales grew 11 per cent to 1.38 lakh units (1.24 lakh units), while motorcycles dipped 8.5 per cent from 2.11 lakh units to 1.93 lakh units.
Two-wheeler exports grew 24 per cent 63,700 units from 51,441 units in the quarter ended December 2010.
Three-wheeler sales were down 12 per cent to 8,899 units (10,079 units). “There has been a cap on three-wheeler permits in the domestic market. The market is being opened up in Karnataka, Delhi and Tamil Nadu. With the government releasing permits, we expect the three-wheeler market to pick up,” Mr Murali said.
TVS Motor's Indonesian subsidiary – PT TVS Motor Company Indonesia – registered total two-wheeler sales of 4,033 units, up 6 per cent from third quarter last year.
For the nine-month period April 2011 to December 2011, the company's cumulative profits increased to Rs 191.84 crore from Rs 150.90 crore in the previous comparable period. Net sales has risen from Rs 4574 crore to Rs 5392 crore.
Apache and Scooty will be launched with significant refresh in February and March, said Mr Murali. The next year (2012-13) will see the launch of two new motorcycles (in the Rs 40,000-50,000 price range) and a scooter.
Going forward, the company expects both motorcycles and three-wheelers to accelerate to a 10-12 per cent growth rate.
Given the subdued market sentiments, auto companies must look to expand their product portfolio to excite customers, said Mr Abdul Majeed, Auto Practice Leader, PricewaterhouseCoopers. The new launches planned by TVS will certainly help going forward, said Mr Majeed.
TVS Motor stock was up 2.95 per cent on Tuesday to close at Rs 52.40 on the BSE.