Summary
TVS Motor Company Limited - Q3 FY 2026 Earnings Call Summary Wednesday, January 28, 2026, 4:00 PM IST
Event Participants
Executives 2 K. Gopala Desikan (CFO), K. N. Radhakrishnan (Director & CEO)
Analysts 8 Annamalai Jayaraj, Binay Singh, Chandramouli, Gunjan, Himanshu Singh, Kapil Singh, Kumar Rakesh, Pramod Kumar, Raghunandhan
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Operating Revenue | ₹12,476 crores | +37% YoY; Highest ever quarterly revenue driven by 27% volume growth. |
| Operating EBITDA | ₹1,634 crores | +51% YoY; Supported by scale benefits, premiumization, and cost reduction. |
| EBITDA Margin | 13.1% | +120 bps YoY; On a normalized basis (ex-PLI timing), up 70 bps YoY and 40 bps QoQ. |
| Operating PBT | ₹1,315 crores | +57% YoY; Excludes ₹41 crores exceptional item for new labor code service costs. |
| Net Profit (PAT) | ₹940 crores | +52% YoY; Growth in line with strong operating performance. |
| 2W ICE Domestic Sales | 21% Growth | Outperformed industry growth of 16% for the quarter. |
| 2W EV Sales | 1,06,000 units | +40% YoY; Overcame prior magnet supply constraints; market share increasing. |
| 3-Wheeler Sales | 60,000 units | +107% YoY; Volumes more than doubled compared to 29,000 units in Q3 FY25. |
| International Revenue | ₹2,909 crores | +35% YoY in sales; Growth led by recovery in Africa and Sri Lanka. |
| Spare Parts Revenue | ₹1,183 crores | Integral part of top-line growth and margin support. |
| Net Worth/Book (TVS Credit) | ₹29,678 crores | +9% YoY; Total customer base reached nearly 2.3 crores. |
Geographic & Segment Commentary
- Domestic Market: Growth driven by a 20% industry uptick post-GST reduction, with urban growing at 21% and rural at 19%. Scooters and premium motorcycles are leading the recovery, supported by infrastructure and retail financing.
- International Markets: Exports grew 35% YoY, outperforming the industry’s 23%. African markets are recovering on a QoQ basis, LatAm remains steady, and Asia is bolstered by a strong comeback in Sri Lanka; Europe remains a laggard.
- EV Segment: Penetration is currently lower at 7.5% growth for the industry, but TVS is outperforming with iQube and Orbiter. 3W EV penetration reached 32% this quarter, with the TVS King EV gaining market share in the L5 category.
Company-Specific & Strategic Commentary
- Premiumization: Strategic focus on high-emotion luxury and premium segments to drive margins; new Norton families (Manx and Atlas) were unveiled at EICMA 2025 for a 2026 launch.
- Electric Vehicle Expansion: Ramping up TVS Orbiter production to 10,000 units/month while maintaining iQube production at 30,000-32,000 units/month despite global magnet supply challenges.
- Cost Management: Implementing a balanced strategy of scale benefits, material cost reduction programs, and modest price hikes (0.2%-0.3%) to offset commodity inflation.
- TVS Credit: Focus remains on risk-calibrated growth with PBT growing 21% to ₹390 crores; invested an additional ₹200 crores this quarter to support book growth.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Industry Growth (Q4) | >15% | Driven by full-quarter impact of GST reduction and positive rural sentiment. |
| Annual Growth (FY26) | ~9% | Modest first half (2%) offset by robust exit momentum in H2. |
| Long-term CAGR | 8% - 10% | Management sees sustainable growth based on mobility needs and self-employed demographics. |
| Capex (FY26) | ~₹1,700 crores | Revised slightly upward to support capacity expansion in high-demand segments. |
| Investments (FY26) | ~₹2,900 crores | Increased from ₹2,000 crores to support Norton, TVS Credit, and ION projects. |
Risks & Constraints
| Risk | Context |
|---|---|
| Commodity Inflation | Upward pressure in aluminum, copper, and precious metals (platinum/palladium) with a total impact of ~0.4%. Management is mitigating through scale and 0.3% price hikes. |
| Supply Chain | Previous magnet shortages impacted EV production; while easing, management is closely monitoring global availability to reach production targets. |
| Global Macro | Europe continues to face demand challenges and may not see improvement for several quarters; Mexico faces new duty structures being addressed via localization. |
Q&A Highlights
Domestic Growth & GST
- Question: Is there upside risk to the 8-10% industry growth guidance given the 20% growth in Dec? (Chandramouli)
- Answer: Q4 should see 15%+ growth. While H1 was slow at 2%, the “exit” performance is excellent. GST benefits are playing out across the product basket. (K. N. Radhakrishnan)
EV Profitability & PLI
- Question: When will EVs turn EBITDA breakeven and what is the PLI impact? (Kapil Singh / Sonal Gupta)
- Answer: EV contribution is positive and improving quarter-on-quarter. PLI benefit is currently ~0.7% of total revenue. Overall company EBITDA of 13.1% reflects that EVs are performing well within the portfolio. (K. N. Radhakrishnan)
Norton Strategy
- Question: What is the timeline for Norton launches and the investment involved? (Gunjan)
- Answer: Products hit the market in 2026. Cumulative investment in Norton reached ~₹290 crores this quarter. Focus is on super-premium luxury to delight global affluent customers. (K. N. Radhakrishnan)
Supply & Capacity
- Question: Are there product shortages in the market? (Pramod Kumar)
- Answer: No structural shortages for ICE; EV was constrained by magnets but is recovering. TVS maintains a lean 21–30 day dealer stock to ensure freshness. (K. N. Radhakrishnan)
Key Takeaway
TVS Motor Company delivered a record-breaking Q3 FY26, with revenue growing 37% to ₹12,476 crores and EBITDA margins reaching a peak of 13.1%. The company significantly outperformed the industry in domestic ICE (+21%), international markets (+35%), and EVs (+40%), despite global headwinds in supply chains. Strategic investments were scaled up to ₹2,900 crores for the fiscal year to accelerate the Norton brand’s 2026 launch and fuel TVS Credit’s expansion. Management remains highly optimistic for Q4, guiding for industry growth above 15% backed by the GST reduction and improving rural sentiment. While commodity inflation remains a watchpoint at ~40 bps, the company intends to offset this through scale, premiumization, and targeted 30 bps price increases. TVS Motor Company is positioned for a strong fiscal exit with a focus on capturing higher market share in the evolving premium and electric scooter segments.
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