TVS Motor Company is looking to achieve multiple targets in the next few years — growing its profit margins along with market share, boosting international sales and readying its products well ahead of the BS VI deadline. This was revealed by CMD Venu Srinivasan at the company’s 26th AGM here.
“Our focus will be on growing our exports further this year. However, the single major thrust for the company is to expand profit margins. Our EBITDA was sacrificed in order to improve quality and increase market share. I believe the time has come for the company to focus on improving EBITDA while striving to achieve 16 per cent market share,” he said. The company’s overall share in the two wheeler segment stood at 14 per cent in FY18.
He said the next major competitive challenge would be implementation of BS VI norms before 2020. “After BS III and BS IV, this is going to be the next major disruption in the auto industry. I am happy to say that we are well equipped towards that and we will try to be compliant six months before the deadline,” he added.
On electric vehicle plans, Srinivasan said that while R&D activities are going on, the market is still not favourable for launching electric two-wheelers. “When it makes commercial, economic and strategic sense, we will do it,” he said.
The company’s Indonesian subsidiary has started to do well, he said. The target is to achieve breakeven this fiscal.
The company expects two-wheeler sales to grow at more than 10 per cent during this fiscal.
Q1 results
TVS Motor reported a 14 per cent increase in its profit after tax at ₹147 crore for the quarter ended June 30, against ₹129 crore in Q1 of FY18. EBITDA stood at ₹ 306.5 crore against ₹228 crore (before GST discount of ₹16.5 crore).
The company’s profit before tax stood at ₹212 crore (against ₹179 crore which included a notional fair valuation gain of ₹37 crore and a one time GST discount of ₹16.5 crore given to dealers for the quarter ended June 2017).
Its total revenue excluding excise duty grew 21 per cent to ₹4,171 crore (₹3,457 crore).