While local lockdowns could impact operations in the first quarter of this fiscal, TVS Motor is hopeful that it will not be an encore of last year when the country went into a complete lockdown.
This time around, there are some positives in the form of the vaccination drive and strong rural demand. In a recent conference call, KN Radhakrishnan, Director and CEO, said the management continues to monitor the pandemic situation closely. TVS Motor has earmarked capex of Rs 500-600 crore and another Rs 250-300 crore in emerging technologies and products this fiscal.
These include electric vehicles, digital initiatives etc while nearly half of the new investments will be in TVS Credit Services, the retail finance arm. With commodity prices increasing by about 1.5 percent during Q3 of FY21, the company had also hiked vehicle prices by about one percent followed by a 1.6 percent hike on April 1.
However, commodity prices had increased by 1.9 percent and the management expects the balance 0.3 percent to get mitigated through greater focus on premium bikes, increasing localisation/exports and implementing more cost reduction initiatives.
TVS Motor’s revenue from operations grew 53 percent to Rs 5,322 crore in in the January-March quarter from Rs 3,481 crore las year. Profit after tax was up nearly four-fold to Rs 289 crore from Rs 74 crore.