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TVS posts 19.4 per cent jump in net profit; in line with estimates

Analysts dub the results as in line with estimates, including anticipated losses caused by the Chennai floods.

, ET Bureau|
Updated: Jan 29, 2016, 06.37 PM IST
CHENNAI: TVS Motor Company, the country's third largest two-wheeler manufacturer, today posted a 19.4 per cent jump in net profit over the corresponding third quarter of FY15, a performance slightly dented by anticipated losses caused by the floods and some pay-out due to a retrospective amendment to the Bonus Act.

Analysts dub the results as in line with estimates, including anticipated losses caused by the Chennai floods. A Mumbai-based analyst, who wished to remain unnamed said TVS, trying to break into the executive two-wheeler segment, will face tough competition from The Hero Group, which dominates this segment. "They want to gain market share in the executive segment. Their launches clearly have that focus. About 60 per cent per cent of the 9-10 lakh two-wheelers sold in India belong in the executive segment. Another player who is trying to enter is Yamaha, which had some time back launched the Saluto, to be manufactured at its plant in Chennai.

In a statement to the BSE, TVS said: "The reported profits are after provision for one off expense of Rs 7.5 crore consequent to floods in Chennai and a further sum of Rs 10.6 Crores was provided on account of retrospective amendment to Bonus Act."

Surely, TVS sold more during the quarter that ended in June. Selling scooters and geared motorcycles, and automotive parts, TVS rustled up a sales volume of 7,02,044 units, an increase of seven per cent over the same quarter last year. Its key metrics revenues registered a growth of 11 per cent at Rs 2,940 crore.

TVS Motor Company had had made a few investments recently, in new product launches and expansion of its two-wheeler manufacturing plant at Hosur in Krishnagiri in Tamil Nadu. It brought the Victor brand after a 13-year hiatus. It also launched the TVS Apache RTR 200, a powered bike that it claims can touch a top speed of 128 kmph.

At the launch, the company's managing director Venu Srinivasan had said: "This launch is yet another reiteration of the TVS promise, to deliver high quality customer centric products." It also launched a variant of the long-standing XL range of mopeds. The XL100, with a 99.7 cc engine, is fit for price-conscious riders carrying light loads across the city.

The share price of TVS Motor was down 1.56 per cent mid-day on Friday at Rs 287.10.
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