TVS MOTOR EXPECTS STRONG EARNINGS GROWTH IN Q1FY24

India’s second-largest two wheeler manufacturer, TVS Motors Company, is likely to announce a strong earnings growth result of first quarter, financial year 2024 this upcoming week. Sales and Other margins are expected to rise as the company witnesses positive changes. 

TVS Motors Profit Result

TVS Motors Company’s consolidated net profits rose to ₹434.30 crore by 42% year on year in the first quarter of financial year 2024, while revenue jumped by 20%. Last year, the company had reported a profit of ₹305.37 crore only. 

Product Innovation of TVS

TVS Motors company Ltd is launching brand new products, the TVS Apache RTR 200 4v, the TVS Ntorq 125 and the TVS Ronin, which apparently are likely to increase the domestic sales growth of the automobile company by their driving popularity. The bookings for TiQube are as strong as ever. 

Financial Analysis of TVS 2024

Highest-ever operating EBITDA, earnings before interest, tax, depreciation and amortisation was reported by the company at ₹764 with 27% growth for the first quarter. In correspondence to the last year quarter, the EBITDA to be reported stood at ₹599 crore. 

During the reporting quarter, revenue from operations rose by 20% year on year to ₹7218 crore. 

Profit before tax was reported ₹610 crore marking 41% growth for the first quarter. 

Total expenses jumped 41% to ₹6665 crore as compared to ₹5599 crore for the last year, which indicates that the company may be investing more on launching the new products or other services. 

Role of TVS company sales

In comparison to previous year, the sales have shown a considerable rise, resulting in the profitable financial statement.

 Motorcycle sales increased by 7% to 4.63 lakh units in the first quarter. Petroleum based scooters and electric scooters also picked up the same pace in growth, while the decline in three-wheeler vehicles sales was a sharp blow to the company. The three wheeler sales declined to ₹9.05 units while the last year sales being ₹ 9.53 lakh units. The electric scooter sales plummeted up by 9000 units and the scooter sales went up to ₹3.06 lakh units by 11%.

According to the data, the domestic sales of the company are likely to increase by 10-12%, due to strong demand for the company’s motorcycles and scooters. 

Other factors for profit of TVS

The company is quite largely benefiting from the export demand, which has increased by 5% this year, triggered by a favorable product assortment and cost savings from its four manufacturing plants in India and Indonesia. The exports of the company have risen by 5% to 9.53 lakhs while the last year quarter being only 9.30 lakhs. 

The company will also benefit from the economies of scale from its new manufacturing site facility in terms of tax reduction and other governmental causes. TVS also has its footprints and demand in international markets of countries like Africa, Indonesia and Latin America. 

Risks relating factors

Despite all the luck and favored environment, there are always some uncertainties and unavoidable situations every business has to deal with. A decrease in the rate of growth of real Gross Domestic Product or economic slowdown like declining consumer and business confidence, rising unemployment, effect on global trade, rising raw material cost, governmental controls and severe competition can have a serious impact on any business. Recently it suffered a blow due to decline in the NIFTY. Fourth quarter motor share price is ₹1334.5 at BSE.