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TVS Motor to invest Rs 22 billion in FY2; 50% to capex
Industry News- Aug 13,24
TVS Motor's recent acquisition, Norton Motorcycles, will see the launch of six new products over the next three years.
TVS Motor Company has announced an allocation of Rs 22 billion for the current financial year, focusing on capital expenditure, product development, new launches, and marketing.
Approximately 50% of this budget will be dedicated to capital expenditure, with the remainder split between product development, new launches, and marketing initiatives, according to K N Radhakrishnan, Director and CEO, TVS Motor. During the Q1 FY2025 earnings call, Radhakrishnan outlined that the capex for this year is expected to be between Rs 10-11 billion, with additional investment in similar amounts.
In the first quarter, significant investments included Rs 3 billion in TVS Credit Services, Rs 1 billion in Norton Motorcycles, and Rs 300 million in the EV cycle business, Swiss Mobility. Radhakrishnan emphasised that a large portion of the investment went to TVS Credit Services.
TVS Motor's recent acquisition, Norton Motorcycles, will see the launch of six new products over the next three years. The company plans substantial investment in engineering, R&D, and the development of Norton motorcycles, with Rs 12 billion already invested in the British subsidiary. Norton-branded motorcycles are also expected to be introduced to the Indian market, leveraging the country's demand for premium vehicles.
In addition to Norton products, TVS Motor is preparing to launch a petrol-powered two-wheeler, an e-scooter, and a three-wheeler. The company aims for double-digit volume growth this fiscal year, driven by a recovery in rural markets. Radhakrishnan noted that rural India is increasingly interested in new products, which is crucial for overall economic growth.
TVS Motor is also expanding its international footprint, with plans to export EV products to ASEAN markets. The company has manufacturing units in India and Indonesia and multiple distribution centers abroad. The presence in Indonesia, coupled with the ASEAN Free Trade Agreement, will facilitate EV exports to the region.
For the quarter ending June 30, TVS Motor reported a 23% increase in consolidated net profit to Rs 5.77 billion, up from Rs 4.68 billion year-on-year. Revenue from operations rose 16% to Rs 83.76 billion compared to Rs 72.18 billion in the same quarter last year.
(Money Control)
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