Latest news with #Hosur-based
Mint
29-04-2025
- Automotive
- Mint
TVS investments in loss-making UK arm Norton spark analyst concerns
TVS Motor Company Ltd's investments into its loss-making United Kingdom-based subsidiary Norton continues to concern analysts who expect that the company is still far away from generating meaningful revenue. India's third-largest two-wheeler seller's management highlighted during the post-Q4 results earnings call on Monday that the company will focus on developing new product range for Norton, which is expected to hit the markets by the end of the current fiscal year. At least two brokerage firms highlighted that the investments into the subsidiary are weighing on the overall performance of TVS, while a third analyst noted that meaningful revenue from Norton will only come in the second half of financial year 2027. 'Capital allocation remains a concern. TVS has heavily invested in foreign subsidiaries. Over the last five years, these investments have grown at ~25% CAGR,' analysts at Nirmal Bang wrote in a 29 April note. 'On a cumulative basis, these subsidiaries have been making losses with the bulk of the losses booked in Norton and SEMG.' Norton was acquired by the Hosur-based company in 2020 in an all-cash deal for ₹ 153 crore. Since taking over the motorcycle brand, TVS has invested more than ₹ 1,000 crore into the company. In 2021, it opened a new plant in Solihuli, UK, with a capacity to produce around 8,000 motorcycles annually. Through these investments, TVS wanted to create products for the global market through the Norton brand. However, losses have piled up. Ebit (earnings before interest and taxes) losses from subsidiaries, which includes Norton but excludes TVS Credit, stood at ₹ 140 crore in 4QFY25 versus ₹ 91 crore in 4QFY24, according to a 29 April note released by Kotak Institutional Equities. TVS did not respond to Mint's emailed queries. Analysts at Kotak Institutional Equities also noted that free cash flow generation of the company, or the cash generated by its business, saw a sharp decline of 83% to reach ₹ 230 crore due to capital expenditure and investments nearly doubling to about ₹ 4,000 crore in financial year 2025. 'Increased losses from subsidiaries (excluding TVS Credit) need to be monitored,' Rishi Vora of Kotak noted. 'The company continues to incur losses on the Norton Motorcycle subsidiary as it continues to undertake costs of the development cost of TVS Motor.' To be sure, this is not the first time the company is facing tough questions on the viability of its UK-based business. Faced with persistent questioning by analysts in the October 2023 earnings call, the management of the company had put up a brave face. TVS CEO K.N. Radhakrishnan had expressed confidence in Norton's ability to generate profits earlier. "You give me a few more quarters, Norton will start delivering very good results for the company," Radhakrishnan said in October 2023. Large share of investments is going into product development for Norton. The first new product under development is expected to hit the market by the end of this financial year. But some believe the company is still far from generating meaningful revenue. In a note dated 29 April, analysts at Axis Securities wrote that increased investments have muted the company's free cash flow. 'We estimate Norton's business to be able to generate meaningful revenues by H2FY27,' Shridhar Kallani of Axis Securities wrote in the note. TVS reported its earnings on Monday, in which it beat estimates. During the January to March period, the company saw its net profit jump 76% to ₹ 852 crore, from ₹ 485 crore in the year-ago period. Total revenue during the period grew 17% to ₹ 9,565 crore, from ₹ 8,140 crore a year ago. For the full year, its profit grew by over 30% to reach ₹ 2,710 crore, while revenue rose 14% to ₹ 36,309 crore. During the year, it also recorded the highest-ever sale of 4.7 million units of two-wheelers in the country. But the better-than-expected performance of the company was not able to impress investors. On Tuesday, TVS shares closed 3.4% lower as against a 0.24% fall in Nifty Auto. First Published: 30 Apr 2025, 05:00 AM IST
Mint
28-04-2025
- Automotive
- Mint
TVS Motor remains bullish on growth as FY25 ends with strong momentum
TVS Motor Co . Ltd announced better-than-expected earnings for the January-March period, citing strong scooter sales in the country that helped it record its highest-ever profit during the last fiscal year. The Hosur-based TVS, which doesn't give forward guidance for growth, remains optimistic that the growth momentum during the current year will continue due to a reduction in interest rates, relief in income tax and a normal monsoon. During January-March, the third-largest two-wheeler seller saw its net profit jump 76% to ₹ 852 crore, up from ₹ 485 crore in the year-ago period. Total revenue grew by 17% to ₹ 9,565 crore, up from ₹ 8,140 crore in the year-ago period. A Bloomberg poll of analysts had predicted ₹ 731 crore profit and ₹ 9,283 crore revenue during the quarter. Also read: How IPO-bound Ather Energy intends to take on the competition For the full year, its profit grew by over 30% to ₹ 2,710 crore, while revenue rose 14% to ₹ 36,309 crore. 'We expect the strong growth momentum to continue. The first quarter may see flattish growth due to the base effect in April, but a good marriage season will lead to better growth in the following months," TVS Motor CEO K.N. Radhakrishnan told analysts during a post-results earnings call. During the previous financial year, the company recorded its highest-ever sales figure at 4.7 million, led by strong momentum in the scooter segment. As per Society of Indian Automobile Manufacturers (SIAM) data, its scooter sales jumped by 25% to reach 1.8 million units in the domestic market during the last fiscal year. The scooter segment's strong growth offset the decline in motorcycle sales. In the previous fiscal year, motorcycle sales in the company's domestic market declined 2% to 1.2 million units. 'The share of scooters in the overall market was around 38%. It will go up. A big reason has been the increasing penetration of electric scooters," Radhakrishnan said. With TVS Motor's sales growth remaining strong, it was able to outpace Hero Motocorp Ltd. As against a 5% growth for the Delhi-based firm, TVS recorded a 12% jump in its two-wheeler sales. The management highlighted that its electric scooters continue to attract great traction from customers, and it will continue to invest heavily in introducing new products. During the current fiscal year, there will be more launches in the space. According to the company's statement, its electric vehicle sales grew by 44% to 2.79 lakh units in the year 2024-25, as against 1.94 lakh units during 2023-24. Also read: Former Suzuki CEO Osamu Suzuki conferred Padma Vibhushan posthumously, India's second-highest civilian award However, the firm remains hopeful that some of its products, such as the TVS Raider in the 125 cc range and the Apache bike series, will do well. On the international front, the company is optimistic about growth in key markets such as Africa, Latin America, and Asia. 'Latin America and Asia have done well. Performance in Africa was mixed due to a slowdown in some key markets. We remain quite optimistic that our growth in both domestic and international markets will be higher than the industry's growth," Radhakrishnan noted. Analysts remain optimistic about the company's growth prospects. 'Higher salience for scooters and their increasing share in the market is a net positive for the company. They are able to maintain good margins along with expansion in the scooter market," Saji John, senior research analyst at Geojit Financial Services , said. Also read: Ather Energy IPO Day 1 Highlights: Issue subscribed 16% so far, retail booked 63%; check GMP and other details 'However, one thing to watch out for will be how the company will build on its total sales from here, given they are on such a high base. The competition is also increasing in the scooter segment, particularly in EVs." In the financial year 2024-25, Bajaj Auto increased its sales in electric vehicles by more than 100% to cross the 2-lakh mark. The difference in market share with TVS also closed down to 0.6% from 8% earlier. TVS Motor's shares during the year have grown by 15% as against a 3.4% fall in Nifty Auto.
Mint
27-04-2025
- Automotive
- Mint
TVS Motor looks to close FY25 on a high as scooter sales boost performance
For K.N. Radhakrishnan-led TVS Motor Company Ltd, the fiscal year 2025 was one of many firsts. The company managed to maintain a healthy balance of traditional fuel vehicles and the new-age electric vehicles to record its highest-ever sales of 4.7 million. The country's third-largest two-wheeler seller outpaced the market leader Hero Motocorp Ltd in terms of growth. As against a 5% growth for the Delhi-based firm, the Hosur-based TVS recorded a 12% jump in its two-wheeler sales. Even in the EV two-wheeler space, TVS Motor was able to take the challenge to market leader Ola Electric Mobility Ltd which recorded just 4.5% growth in the financial year 2025. In contrast, TVS posted a growth of nearly 30% to cross 2 lakh sales. The ambition to take the challenge to the market leaders was set by Radhakrishnan in the very first quarter of the previous financial year. However, it did not go in favour of the company. During the year, its domestic sales of motorcycles declined by 2% even as the motorcycle market grew by 5%. In the electric vehicle space, Bajaj has closed the gap with TVS in market share from a difference of 8% in the financial year 2024 to just 0.5% at the end of March 31. However, analysts remain bullish about the prospects of the 63-year-old company. 'We expect TVS Motor's market share to remain steady in the motorcycle segment; however, expect overall market share to improve to 18.3% in FY2027 from 17.1% in FY2024," analysts at Kotak Institutional Equities wrote in a 13 March note. Against this backdrop, Mint lists five things to look out for when TVS announces its results for the January to March quarter on Monday . As per average estimates of four brokerages, the company will post revenue growth of around 13% in the last quarter of the financial year 2025. In Q4FY24, the company's revenue grew 24% to ₹ 8,168 crore. Analysts attribute the double-digit growth in revenue to the strong surge in volumes in a year where total scooter sales in the country crossed the pre-pandemic total of 6.7 million for the very first time. 'Revenues are expected to increase by ~15% YoY, led by a 15% YoY increase in volumes, a richer domestic vehicle mix being partly offset by higher export volumes (exports being of lower cc models)," analysts at Axis Securities wrote in a 9 April note. The company recorded a 14% growth in two-wheeler sales during January-March period, with sales increasing to 11.80 lakh units from 10.32 Lakh units in the fourth quarter of financial year 2023-24. Also Read: The TVS Group's nuclear family pact is path-breaking The average of four analyst estimates for the quarter suggests that the profitability of the company will see a nearly 40% growth to around ₹ 680 crore in the March quarter as margins expand. To be sure, the estimates of the brokerages have not accounted for any PLI benefit the company may have accrued during the quarter. 'We expect Ebitda margin to expand 70bp YoY to 12% led by favorable product mix and cost control," analysts at Motilal Oswal Financial Services wrote in a 7 April note. The management's commentary on the international business will be closely watched as the company recently completed the acquisition of Singapore-based electric vehicle start-up Ion Mobility's assets for $1.7 million to expand its presence in Southeast Asia. During the January to March period, the exports of the company grew by 31% to 3.40 lakh units. Commentary on whether international volatility due to the announcement of tariffs by the US administration will affect the growth will be closely tracked. TVS Motor has rapidly expanded its electric vehicle sales in the last few years. From sales of 9,740 units in the financial year 2022 to more than 2.3 lakh in the financial year 2025, the trend suggests that the company is rapidly expanding its EV offering. Launched in May last year, TVS' economic iQube 2.2 kWh model has managed to boost sales in the previous year which saw nearly 30% growth. Although it is challenging the market leader Ola Electric for the leadership, it is increasingly coming under pressure from Bajaj Auto which saw a more than 100% jump in EV two-wheeler sales in the last financial year. A key highlight to watch for would be company's plans for new product offerings and how the company will stave off competition as it looks to defend its 20% market share. Also Read: EVs hit with falling resale value as consumer demand cools While scooter sales in the country are surging ahead, the company is facing pressure in the motorcycle segment which is witnessing weak demand in the cheap economical segments. During the last financial year, the pricier Apache Bike series of the company witnessed strong growth of 18% to reach 4.46 lakh sales. Management's commentary on whether it will increase focus towards premium bikes will be a key highlight as the economy segment is recording weak demand. Also Read: TVS Motor zooms in Q3 but speed bumps lie ahead
New Indian Express
23-04-2025
- Business
- New Indian Express
Ather fixes price-band at Rs 304-321 for Rs 2,981 IPO
MUMBAI: Pureplay electric scooter maker Ather Energy has fixed Rs 304-321 as the price-band for its twice scaled down issue of Rs 2,981 crore, which includes a Rs 2,626 crore of fresh issue and a more than halved offer for sale of Rs 355 crore. The issue will open next Monday. The price band of the offer has been fixed at Rs 304/equity of Re 1 face value in the lower end and at Rs 321 in the upper end, the company told reporters here on Wednesday. This the largest IPO of the new fiscal and the second in the EV space after the larger rival Ola Electric's issue last August. The offers comprises a fresh issue of upto Rs 2,626 crore and an offer for sale of 11,051,746 shares by the selling shareholders comprising up to 9,80,000 by Tarun Sanjay Mehta, 9,80,000 shares by Swapnil Babanlal Jain (the selling promoter shareholders), 60,03,460 by Caladium Investment, 26,34,514 by National Investment and Infrastructure Fund II, 4,00,000 by Internet Fund III, 31,050 by IITM Incubation Cell, 4,191 equity shares by IITMS Rural Technology and Business Incubator and up to 18,531 shares by Amit Bhatia, the Ather Energy said. This is the second downward revision of the issue size and valuation, which was earlier trimmed by 35% to $1.5 billion and it values the company under Rs 14,000 crore. Initially the company planned to mop up Rs 4,500 crore from the issue which was then cut to around Rs 3,850 crore, including a Rs 3,100 crore fresh issue and an around Rs 750 crore in secondary sale by way of an offer for sale by cofounders and certain investors. However, the largest shareholder Hero Motorcorp with over 37.2% will not be participating in the OFS. The Hosur-based company was cofounded by IIT-Madras alumni Tarun Mehta (chief financial officer) and Swapnil Jain (chief technology officer) who hold 6.63% each in the company. Singaporean sovereign fund GIC holds 15.04%, the India-Japan Fund owns 10.29%, the NIIF holds 6.6% and Tiger Global has 6.39%.
