TVS Motor Surges Ahead with 16% Sales Growth—Here’s What Investors Need to Know

TVS Motor Company has delivered a standout performance in its fiscal year 2024-25 (FY25), reporting a 16% year-on-year (YoY) rise in revenue to ₹11,542 crore for the quarter ending March 2025 (Q4 FY25). This robust growth, driven by strong sales across two-wheelers, scooters, and electric vehicles (EVs), positions TVS as a leader in India’s two-wheeler market. But what does this mean for investors? Let’s dissect the numbers and trends.

The Sales Breakdown: Scooters Lead the Charge

TVS’s sales growth was uneven across segments but highlighted clear strategic wins:
- Two-Wheelers: Motorcycle sales grew 10% YoY to 564,000 units, while scooters surged 27% to 502,000 units. This shift toward scooters reflects rising demand for affordable, fuel-efficient transport.
- Three-Wheelers: Sales dipped 7.5% annually to 135,000 units, signaling softness in this segment. However, the electric three-wheeler category (37,000 units sold in Q4 FY25) grew 21%, driven by government incentives like the Production Linked Incentive (PLI) scheme.
- EVs: The star performer was EV sales, which jumped 54% YoY in Q4 FY25 to 76,000 units. For the full year, EV sales hit 279,000 units, a 44% increase, cementing TVS’s position as a top player in India’s EV revolution.

Profitability Soars Amid Cost Discipline

The sales surge translated to stellar profitability:
- Net Profit: Jumped 68% YoY in Q4 FY25 to ₹648.1 crore, fueled by higher volumes and PLI benefits.
- EBITDA Margin: Hit a record 14% (excluding PLI benefits, it still rose to 12.5%, up from 11.3% in Q4 FY24), reflecting operational efficiency and pricing power.
- Exports: Grew 18% YoY to 1.195 million units for FY25, with two-wheeler exports surging 23% in March 2025 alone. This global expansion, including partnerships like the one with Hindi Motors in Morocco, reduces reliance on domestic demand.

Key Risks and Challenges

• Three-Wheeler Slump: The segment’s 7.5% annual decline could weigh on margins unless new product launches revive demand.
• EV Competition: While TVS leads with a 500,000+ EV customer base, rivals like Bajaj Auto and Ola Electric are closing the gap. TVS plans to counter this with new models and localized battery production.
• U.S. Tariffs: Trade barriers on Indian auto exports to the U.S. pose a risk, but TVS is mitigating this via Southeast Asian markets like Singapore (via its Ion Mobility acquisition).

Investor Takeaways: A Strong Growth Story?

TVS’s performance signals a well-executed strategy focused on scooters, EVs, and exports. The 14% EBITDA margin and ₹10-per-share dividend (totaling ₹475 crore) highlight financial health.

The stock closed at ₹2,803.55 on April 28, up 2.48% post-results, reflecting investor optimism. However, valuations are rich—trading at ~28x FY26 earnings—so growth must sustain.

Conclusion: TVS Motor’s Momentum Looks Strong

TVS Motor’s FY25 results underscore its ability to capitalize on structural trends like EV adoption and global expansion. With 44% annual EV growth, 18% export expansion, and a record EBITDA margin, the company is well-positioned for FY26.

• Why Invest?
• EV Leadership: 500,000+ EV customers and 44% annual sales growth in this high-growth segment.
• Global Footprint: Exports now account for 25% of sales, reducing domestic demand dependency.

• Plentiful Incentives: PLI benefits and government schemes like PM E-Drive will further boost margins.

• Cautions:

• Monitor three-wheeler recovery and U.S. trade dynamics.
• EV competition could compress margins if pricing wars erupt.

For long-term investors, TVS’s dividend yield (~1.4%) and expansion into 80+ countries offer stability amid growth. While valuations are elevated, the company’s execution has been consistent—making it a compelling play on India’s two-wheeler and EV boom.

In sum, TVS Motor’s FY25 results are a green light for growth, but investors must keep a watchful eye on execution in EVs and emerging markets.