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TVS Motor Company’s financial performance in the third quarter of this fiscal reflected the negative impact of demonetisation on its sales.
While it managed to post 10 per cent increase in its net profit at ₹133 crore for the quarter ended December 31, 2016, when compared with ₹120 crore in the year-ago period mainly aided by higher other income and lower tax expenses, its operating profit was hit due to poor topline growth.
Profit before other income, finance costs and exceptional items was lower at ₹147 crore compared with ₹170 crore in the year-ago period, according to a company statement.
Other income stood at ₹35 crore when compared with ₹25 crore Q3 of previous fiscal.
Its profit before tax (PBT) registered a modest growth of four per cent at ₹170 crore against ₹163 crore in the year-ago period.
The company’s total revenues grew by just three per cent at ₹3,239 crore against ₹3,151 crore in Q3 of previous fiscal, on the back of marginal growth in two wheeler sales.
Amid this, TVS company saw its market share move northwards to 15.5 per cent from 14.3 per cent in Q3 of last year.
“During October, we grew well. But post-November 8, demonetisation had an impact on our sales. But, we are seeing some signs of recovery post-Pongal with improvements in cash positions. We expect stability in sales to come in the next two months,” SG Murali, Chief Financial Officer, TVS Motor Company, told .
During the quarter ended December 2016, the overall two-wheeler sales, including exports, grew by four cent to 7.03 lakh units against 6.76 lakh units.
Motorcycles sales fell to 2.48 lakh units from 2.60 lakh units, while scooter volumes declined to 2.21 lakh units when compared with 2.32 lakh units.
Three-wheeler sales fell significantly to 16,081 units when compared with 26,225 units in the third quarter of 2015-16.
The company exported 0.99 lakh units of two and three-wheelers in the quarter under review against 1.08 lakh units in the third quarter of 2015-16.
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