TVS Motor Reports Strong Q2 Growth, Plans Business Demerger

TVS Motor Company Ltd has reported a significant increase in consolidated net profit for the second quarter of the financial year 2027. The company announced a net profit of ₹1,194.51 crore, up from ₹795.48 crore in the same quarter last year, marking a substantial rise of 50%. This increase is attributed to strong sales in the two-wheeler and three-wheeler segments.

In total, the company sold 1.9 million two-wheelers and three-wheelers during the quarter, representing a growth of 27% compared to 1.5 million units in the same period the previous year. Motorcycle sales specifically surged by 28%, reaching 0.9 million units from 0.7 million units. Additionally, scooter sales increased by 29%, with 0.8 million units sold this quarter compared to 0.6 million units last year.

TVS Motor's international business also showed impressive performance, with a 35% growth, selling 0.5 million units in Q2 2026-27 compared to 0.4 million in the second quarter of the preceding year. The company’s electric vehicle sales saw a remarkable rise of 133%, reaching 186,186 units, up from 80,009 units during the same quarter in the previous year.

The three-wheeler segment reported a growth of 47%, recording sales of 78,475 units against 53,449 units a year earlier. K.N. Radhakrishnan, Director and CEO of TVS Motor Company, stated during a recent analyst call that the market share for scooters, combining internal combustion engine and electric vehicles, has reached 41%. He noted that the internal combustion engine vehicles hold 32-33% of the market, while electric vehicles constitute the remainder.

Radhakrishnan expressed optimism regarding future sales, stating, "The Ronin motorcycle has exceeded the expectations of the company, and I am confident it will surpass 15,000 units." He also anticipates that scooter sales will exceed 50% in the coming years.

In addition to the positive financial results, the Board of TVS Motor Company approved a major restructuring initiative, including the demerger of its consumer finance and related business. This new entity, to be named Harita ARC Ltd, will encompass lending, investments, leasing, and associated support services. The scheme outlines that shareholders will receive one share in the new company for every share held in TVS Motor Company.

The turnover of this finance segment was reported at ₹3,921 crore during the first half of the financial year 2027, alongside the company’s total turnover of ₹35,770 crore. The demerger entails a cash acquisition of Harita ARC Ltd from TVS Credit Services Ltd for ₹25,000 crore, resulting in Harita becoming a wholly owned subsidiary of TVS Motor. Following the demerger, TVS Motor will retain the consumer finance operations.

Currently, TVS Group's non-banking financial arm, TVS Credit, along with Home Credit India, caters to over 45 million customers across 100,000 service points. In a notable transaction last year, TVS Holdings’ subsidiary, Home Credit India Finance, acquired a complete stake in Varthana Finance, an education financing firm, for ₹967 crore. Earlier this year, TVS Motor also took a minority stake in Jana Small Finance Bank.

Sudarshan Venu, Chairman of TVS Motor Company, emphasised the importance of the demerger, stating, "The businesses being demerged have developed strong capabilities, customer relationships, and platforms that position them well for the future. We believe this new structure will create additional value for stakeholders."

The demerger is subject to necessary statutory and regulatory approvals, allowing the Group to explore opportunities in consumer finance and align capital allocation with growth priorities. This restructuring aims to maximise the value of the group’s assets, enabling TVS Motor Company to concentrate on enhancing its mobility leadership on a global scale. The Board has also approved acquiring a controlling interest in STPL Trading and Services Private Limited, which is set to merge with TVS Credit Services, thereby increasing its holding in TVS Credit Services post-merger.