💰 Financial Performance

Revenue Growth by Segment

Total operating revenue grew 29% YoY to INR 11,905 Cr in Q2 FY26. The EV segment registered a 46% volume growth in November 2025 (38,307 units). International business revenue grew 58% in November 2025, while two-wheeler sales specifically grew 52% to 132,233 units. Three-wheeler sales saw a significant 147% growth in November 2025 to 21,667 units.

Geographic Revenue Split

Export revenue for Q2 FY26 was reported at INR 2,885 Cr, contributing approximately 24.2% of the total quarterly revenue of INR 11,905 Cr. The company operates in 80 countries, with major export markets including Nigeria, Bangladesh, Ethiopia, Guinea, UAE, Kenya, and Congo.

Profitability Margins

Profit After Tax (PAT) grew 37% YoY to INR 906 Cr in Q2 FY26, maintaining a net margin of approximately 7.6%. Profit Before Tax (PBT) for H1 FY26 grew 36% to INR 2,279 Cr. Profitability is driven by premiumization and cost optimization, which offset notional losses from fair valuation of investments like TVS Supply Chain shares.

EBITDA Margin

Operating EBITDA margin improved to 12.7% in Q2 FY26, up 100 basis points from 11.7% in Q2 FY25. On a normalized basis (adjusting for PLI benefits), the improvement was 50 basis points. This expansion is attributed to a better product mix and favorable operating leverage from a 29% increase in top-line revenue.

Capital Expenditure

In FY25, the company invested INR 2,128 Cr in subsidiaries and associates, including INR 1,618 Cr in TVS Motor (Singapore) and INR 283 Cr in TVS Credit. For Q1 FY26, incremental investments in subsidiaries totaled INR 478 Cr to support loss funding and global expansion.

Credit Rating & Borrowing

CARE reaffirmed 'CARE AA+; Stable' for long-term facilities and 'CARE A1+' for short-term facilities. The company was assigned a rating for INR 1,900.35 Cr of Non-convertible redeemable preference shares (NCRPS) at CARE A1+. Net automobile debt/PBILDT improved to 1.03x in FY24 from 1.30x in FY23.

⚙️ Operational Drivers

Raw Materials

Key raw materials include steel, iron, and aluminium. While specific percentage splits are not disclosed, the company noted that material cost reductions and price increases were implemented to manage commodity inflation and protect the 12.7% EBITDA margin.

Capacity Expansion

The company is expanding its EV portfolio with the launch of the TVS Orbiter. While specific MTPA/unit capacity was not cited, the company expects to utilize internal accruals and available liquidity to meet capex requirements, with expected cash accruals of ~INR 3,300 Cr in FY26.

Raw Material Costs

Raw material costs are managed through sustained cost reduction initiatives and price hikes. Sequential revenue growth of 18% in some quarters has been used to offset overheads, though specific raw material cost as a % of revenue was not explicitly quantified.

Manufacturing Efficiency

Operating leverage improved as revenue grew 29% while EBITDA grew 40%, indicating that fixed costs are being spread over a larger volume of units, specifically the 1.46 lakh three-wheelers and growing 2W volumes.

Logistics & Distribution

The company maintains a PAN-India dealer network with significant presence in all regions, though it identifies scope for further improvement in the North and West regions to optimize distribution costs.

📈 Strategic Growth

Expected Growth Rate

25-29%

Growth Strategy

Growth is targeted through premiumization of the product mix, aggressive EV expansion (46% growth in Nov 2025), and scaling international business (58% growth). The company is also leveraging its NBFC arm, TVS Credit, which has a book size of INR 27,807 Cr, to drive retail sales through consumer financing.

Products & Services

Two-wheelers (Motorcycles, Scooters, Mopeds), Three-wheelers, Electric Vehicles (TVS iQube, TVS Orbiter), and Financial Services (Consumer and Retail financing via TVS Credit).

Brand Portfolio

TVS, TVS iQube, TVS Orbiter, Norton, TVS Credit, PT TVS.

New Products/Services

Launched TVS Orbiter, an urban EV commute vehicle. New product launches from the Norton brand are expected in the next financial year to target the premium global motorcycle segment.

Market Expansion

Targeting deeper penetration in the North and West regions of India and expanding the international footprint beyond the current 80 countries, specifically focusing on Latin America (Brazil, Mexico) and Southeast Asia.

Market Share & Ranking

Two-wheeler market share increased to 17.2% in Q1 FY26. In FY25, motorcycle market share stood at 13.8% and scooter market share at 25.6%.

Strategic Alliances

Strategic investments in TVS Motor (Singapore) and TVS Credit (NBFC arm). TVS Credit achieved a customer base of over 2.13 crores, supporting the parent company's sales growth.

🌍 External Factors

Industry Trends

The industry is shifting toward EVs and premiumization. TVS is positioning itself by growing EV sales 46% YoY and improving its 2W market share to 17.2% through technology-led products.

Competitive Landscape

Competes with major 2W and 3W OEMs. While the industry grew 10.4% in Q1 FY26, TVSM volumes increased 45.9%, significantly outperforming the market.

Competitive Moat

Moat is built on a strong R&D pipeline, a diversified global presence in 80 countries, and a captive financing arm (TVS Credit) that facilitates sales. This is sustainable due to high entry barriers in EV technology and established distribution networks.

Macro Economic Sensitivity

The 8th Pay Commission is expected to be a potential tailwind, as increased disposable income in consumers' hands typically boosts two-wheeler demand in Q3 and Q4.

Consumer Behavior

Shift toward 'smart' and 'sustainable' urban commutes among young urbanites, leading to the development of the TVS Orbiter EV.

Geopolitical Risks

Political instability in African and Middle Eastern export markets (e.g., Nigeria, Ethiopia) poses a risk to the three-wheeler export business, which saw a volume drop to 1.35 lakh units in FY25.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with PLI scheme requirements for EVs. The company recognized the entire FY24 PLI benefit in Q4 of that year, impacting YoY margin comparisons.

Environmental Compliance

The company is transitioning toward sustainable mobility with a focus on the PLI (Production Linked Incentive) scheme, which contributed to EBITDA margin improvements.

Taxation Policy Impact

The company benefits from GST 2.0 implementation, which has driven growth in consumer and retail financing for TVS Credit.

⚠️ Risk Analysis

Key Uncertainties

Significant exposure to subsidiaries (89% of net worth) is a key monitorable. Deteriorating performance in loss-making associates could weaken liquidity, which currently stands at INR 805 Cr in cash/liquid investments.

Geographic Concentration Risk

High dependence on South India for domestic sales (though expanding) and specific African markets for 3W exports (Nigeria, Congo, etc.).

Third Party Dependencies

Dependency on magnet suppliers for EV production was cited as a challenge in Q2 FY26.

Technology Obsolescence Risk

Risk of ICE obsolescence is being mitigated by aggressive EV launches and R&D in 'smart' vehicle technology.

Credit & Counterparty Risk

TVS Credit manages a book of INR 27,807 Cr with a focus on 'risk-calibrated growth' to maintain receivables quality across 2.13 crore customers.