- Revenue: INR 31,776 crores, a 20% increase from INR 26,378 crores.
- Profit Before Tax (PBT): INR 2,781 crores, a 39% increase from INR 2,003 crores.
- Profit After Tax (PAT): INR 2,083 crores, a 40% increase from INR 1,491 crores.
- Operating EBITDA Margin: Improved by 100 basis points from 10.1% to 11.1%.
- Operating Free Cash Flow: INR 2,259 crores, up from INR 795 crores.
- Net Debt: Reduced to INR 1,028 crores as of March 31.
- Q4 Operating Revenue: INR 8,169 crores, a 24% increase from INR 6,605 crores.
- Q4 EBITDA: INR 926 crores, a 36% increase from INR 680 crores.
- Q4 EBITDA Margin: 11.3%, up from 10.3%.
- Q4 PBT: INR 672 crores, a 23% increase from INR 547 crores.
- Q4 PAT: INR 485 crores, an 18% increase from INR 410 crores.
- Domestic ICE 2-Wheeler Sales: Grew by 19%, outperforming industry growth of 13%.
- EV Volume: Doubled from 97,000 to 194,000 units.
- International 2-Wheeler Sales: Declined by 3%, compared to industry decline of 5%.
- Q4 Domestic ICE 2-Wheeler Sales: 7.5 lakh units, an 18% increase from 6.36 lakh units.
- Q4 International 2-Wheeler Sales: 2.36 lakh units, a 47% increase from 1.61 lakh units.
- Q4 Electric 3-Wheeler Sales: 49,000 units, up from 43,000 units.
- Q4 Total 2-Wheeler Sales: 10.32 lakh units, a 23% increase from 8.39 lakh units.
- Q4 3-Wheeler Sales: 30,000 units, a 4% increase from 29,000 units.
- TVS Credit Customer Base: Over 1.3 crore customers.
- TVS Credit Book Size: INR 25,900 crores, a 26% increase.
- TVS Credit PBT: INR 763 crores, a 49% increase from INR 512 crores.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- TVS Motor Co Ltd (BOM:532343, Financial) achieved significant milestones in FY '24, surpassing sales of over 4 million units of 2-wheelers and posting all-time highest revenue of INR 31,776 crores.
- The company's operating EBITDA improved by 100 basis points from 10.1% to 11.1%, and profit after tax grew by 40% to INR 2,083 crores.
- TVS Motor Co Ltd (BOM:532343) saw a 100% growth in EV volume, with TVS iQube establishing a strong brand presence in the EV segment.
- The company generated an operating free cash flow of INR 2,259 crores, significantly higher than the previous year's INR 795 crores.
- TVS Motor Co Ltd (BOM:532343) has been awarded the PLI scheme for its current 2-wheelers in the EV portfolio, which is expected to support future growth.
Negative Points
- International 2-wheeler sales declined by 3% over the last year, reflecting challenges in the global market.
- Government incentives for EVs have been significantly scaled down, impacting the overall profitability of the EV segment.
- The company faced a fair valuation loss of INR 47 crores in Q4, compared to a gain of INR 62 crores in the same quarter last year.
- Despite strong performance, the company continues to face challenges in the international market due to ongoing geopolitical issues affecting the supply chain.
- TVS Motor Co Ltd (BOM:532343) has high investment needs, with planned CapEx of around INR 1,000 crores for FY '25, which could impact short-term cash flows.
Q & A Highlights
Q: My first question is on the PLI scheme comments that you had made in the prepared remarks. So it appears that across the industry, there's been between 3% to 4% price hikes after the FAME II subsidies have been reduced. And now that you are eligible for PLI scheme subsidies potentially 13% to 15% subsidies going forward. And there's more iQube products on the way in terms of leveraging the EV platforms? Just trying to understand what sort of time frames you have in mind for a potential positive EBITDA or EBITDA breakeven in the electric 2-wheeler business, just keeping these factors in mind?
A: There are 2 important points in the EV space. Thanks to the PLI scheme, I think that will definitely help the company. We are also now -- based on our learning in the market, the iQube will have more -- multiple options to the customers with the different battery capacity to provide appropriate range and price combination to our customer because that is very, very critical. This is one. Second, as I told you, we are positive in contribution. At this point of time, since we are investing in many new products, I think we need to continue to invest in R&D, technology and digital analytics in this area. But I'm pretty confident that the new product with domestic and then going into the international market, both developing and developed, systematically, we can increase the EBITDA and we can first move into positive territory. But what is heartening is the positive contribution.
Q: My second question is just on the comments you made on more options to be available to customers on the iQube. So just I think in the past 2 to 2.5 years, we have spoken about rough run rate of potential one new launch or one new product refresh on the 2-wheeler side per quarter. Is that the sort of run rate we have in mind for FY '24? And if you could just give us some color on what to expect for customers from TVS in FY '25 on both the ICE premium as well as the electric 2-wheelers pipeline?
A: See, the more options on the current iQube will be available very shortly. The new product, whatever I highlighted, the new products, definitely, you will see in this financial year, both in ICE and EV, okay, they are in advanced stage.
Q: Got it. That's helpful. And just lastly, a couple of housekeeping questions. If you could just explain the negative other income this quarter, where that's coming from? And then also just the spares and the exports revenue for the quarter, please?
A: Sorry, sorry, I was trying to -- didn't understand the question. See, the negative INR 46 crores is mainly because of a notional loss on fair valuation of investments held by the company. In the past, the fair valuation gain was accounted in the last year. And if you see the last quarter, the other income was positive at INR 70 crores where we had a realized gain on sale -- notional gain on fair valuation of investments. And this quarter, there is a loss which is absolutely notional with regard to INR 46 crores of fair valuation of an investment held by the company.
Q: Got it. And just the spares revenue and the exports revenue for the quarter, please?
A: Just a minute. Spare parts and then exports, correct? I think the international business is about INR 2,038 crores. Spare parts, just a minute, spare parts for the quarter is about INR 815 crores.
Q: So my question, again, is on the EV side, but on a potential launch time line for the 3-wheeler EV because I think that is also something that we have been working on. So can you give any time line as to by when we are thinking of this launch and whether this will be mostly a domestic focused product? Or are there plans to export that also whenever we do launch it?
A: It is also in the advanced stage and these products on EV will be not only for India, but also for many of the markets in the international market.
Q: Okay. Okay. So this financial year, should we expect the 3-wheeler EVs?
A: Yes, yes, yes.
Q: Okay, okay. Secondly, on the ICE side, a 2-part question. The 100 -- while scooters -- while ICE scooters as a whole have still continued to grow despite EVs, how is the difference between the 110cc and 125cc? Are we starting to see some pressure on the 110cc scooter, and what's your expectation going forward? And secondly, over the last few years, you have launched quite a few ICE products and addressed a lot of the white spaces. So when we are thinking of more ICE launches, is there any specific segment that you are looking at for the next, say, 12 to 18 months on the ICE launches?
A: I'll go step by step. I think overall, scooter, according to me in the industry, the segment share of scooters will go up because scooter have got exponent advantage and we should know that current 30%, 32% will go up. So expansion in the scooter category will definitely happen. Okay? And that will have both ICE and EV. This is number one. Number two, the customer -- when people have 110cc and 125cc, according to be both will grow. The reason is there are many -- see 2-wheelers have got the unique advantage. And especially scooters have got the unique advantage of both men and women and both urban and semi-urban. And it's also now getting into rural because the road infrastructure, definitely in India is improving now. So that is one of the critical reasons why scooter category is growing ahead of any other categories, number one. Number two, new -- thanks to the population and the demography, I think those people who are in 110cc, they want to upgrade, and they will move to 125, okay? And this is not natural, okay? But more people will get into 110cc, because there are enough young people who wants to start the 2-wheeler experience. And 2-wheelers, because the public transport challenges and India growing in the population. And you know the flexibility what a scooter provides even in urban cities. So I'm of the view that you will see growth in both 125cc and 110cc, okay? Because of the customer segment, demography and the opportunity to grow and flexibility what it offers. I hope I have answered you.
Q: Yes, sir, that's very helpful. And sir, if you could shed some light on potential launches on the ICE
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
