TVS Motor Sees 2W Industry Growing 15% in Q4, 9% in FY26 with GST Boost, Strong Rabi Output

The sharp revival in two-wheeler demand seen in the third quarter of FY26, driven by the GST reduction, is expected to sustain into the final quarter of the fiscal year, supported by healthy rabi output, improving rural sentiment, and easier credit conditions, according to KN Radhakrishnan, CEO and director of TVS Motor Company.

The two-wheeler industry volume is projected to grow by 15% in the fourth quarter, pulling the full financial year growth for 2026 to 9% from the 2% growth seen in the first half of the financial year.

Speaking to investors after the company’s Q3 FY26 earnings, Radhakrishnan said the GST-led demand rebound that lifted industry growth to nearly 20% in the December quarter has fundamentally changed the industry’s growth trajectory in the second half of the year.

“In Q3, post the GST reduction, the industry grew by nearly 20%,” he said, adding that the momentum is expected to continue. “In Q4, also, you will see anything upwards of 15% growth, and the company will try to outpace the market growth.”

Strong Rabi Output to Support Rural Demand

Radhakrishnan said rural demand remains increasingly supportive, helped by a good monsoon, higher reservoir levels, and the resulting strength in rabi sowing, which should sustain two-wheeler purchases into Q4.

“The rainfall has been good, and the higher reservoir levels are going to augur increased rabi sowing, and this should definitely support rural sentiment,” he said.

He added that urban demand has also remained healthy, with Q3 seeing growth of about 21% in urban markets and nearly 19% in rural areas, indicating a broad-based recovery rather than a narrow, segment-led rebound.

Full-year FY26 growth seen at around 9%

While the first half of FY26 was subdued, with industry growth of only about 2%, Radhakrishnan said the strong second-half recovery has reshaped the full-year outcome.

“For the year as a whole, because the first half has not been so great, you will see somewhere around 9% growth,” he said, pointing to a strong exit rate into the final quarter.

Radhakrishnan also highlighted the RBI’s cumulative 125 basis points of interest rate cuts as a key enabler, improving liquidity and credit availability for vehicle financing. He said these macro tailwinds, combined with TVS Motor’s execution strengths, position the company to outperform the industry in Q4.

He pointed to strong traction in scooters and premium motorcycles, rising EV volumes as supply constraints ease, and improving markets in Africa and Latin America as key contributors to growth.

“We are very confident that this momentum will continue,” he said. “Like Q3, you can expect good growth in Q4 as well, and we will do better than the industry.”

On profitability, Radhakrishnan reiterated confidence that higher volumes, premiumisation, and sustained cost-reduction initiatives will continue to support margin expansion.

“With top-line growth, we will liberate scale benefits,” he said.