Ladies and gentlemen, good day, and welcome to TVS Motor Company Limited 3Q FY 2026 post-results earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Annamalai Jayaraj. Thank you, and over to you, sir.
Thank you, Mark. Good afternoon, all the participants. On behalf of B&K Securities, welcome to 3Q FY 2026 post-results conference call of TVS Motor Company Limited. I also take this opportunity to welcome the management team of TVS Motor Company Limited. We have here with us today Mr. K.N. Radhakrishnan, Director and Chief Executive Officer, Mr. K. Gopala Desikan, Chief Finance.
Afternoon.
Mr. K. Gopala Desikan, Chief Financial Officer, and, congratulations on good results, sir. I will now invite Mr. K.N. Radhakrishnan for the opening remarks to be followed by question and answers. Over to you, sir.
Good evening. Good evening, everyone, and thank you for joining us today. Wish you all a very Happy New Year and season's greetings to all of you and your family members. I'm glad to share that this quarter also, we continue to achieve new highs, delivering our highest ever quarterly sales, revenue, and profits. During this quarter, company sales volume grew by 27%, revenue grew by 37%, operating EBITDA grew by 51%, and operating PBT grew by 56%. Let me get into more details about third quarter of this financial year, our performance. On sales, during this quarter, the overall operating revenue grew by 27%, and the revenue is at INR 12,476 crore, as against INR 9,097 crore during the third quarter of last year.
Two-wheeler domestic ICE sales grew by 21% compared to Q3 of last year, as against an industry growth of 16%. International market company sales grew by 35% over last year, as against an industry growth of 23%. Total two-wheeler ICE sales grew by 25% compared to Q3 of last year, and an industry growth of 17%. EV two-wheeler sales grew by 40%, and it has crossed 100,000 this year, 106,000 units, as against 76,000 units during Q3 of last year. Total sales of three-wheeler is more than double to 60,000 units, as against 29,000 units during last year, third quarter.
On profits, during this quarter, company's operating EBITDA grew by 51%, and it is at INR 1,634 crore, as against EBITDA of INR 1,081 crore during Q3 of last year. The company's operating EBITDA margin improved by 120 basis points at the 13.1%, as against 11.9% during Q3 of last year. All of you know that during last year, the entire entire year PLI benefits of FY 2024-2025 was recognized in Q4. On a normalized basis, Q3 FY 2025, EBITDA would have been at 12.4%, which means, we got, 70 basis points on a sequential basis improvement on EBITDA. Okay? On a year-on-year basis, a margin improvement of 70 basis points, and a quarter-on-quarter basis, 40 basis points.
The company registered a PBT before exceptional items of INR 1,315 crore, a growth of 57% during this quarter, as against INR 837 crore. During this quarter, company recognized INR 41 crore as an exceptional item towards the past service costs arising from the new labor codes. Profit after tax for the quarter is INR 940 crore, as against last year, INR 618 crore. Now, when we look at the first nine months up to December, the first nine months of the year, company's operating revenue grew by 29%, and it is at INR 34,463 crore, as against INR 26,701 crore during last year, first nine months.
PBT, before exceptional item for the first nine months is at INR 3,594 crore, as against last year's INR 2,517 crore, a growth of 43%. Profit after tax for the first nine months period is INR 2,625 crore, as against last year's INR 1,858 crore. So overall, very good growth in the first nine months this year. On TVS Credit, TVS Credit continued to witness excellent growth in disbursement. The post GST 2.0 implementation, there is a positive sentiment, and the market is doing well. The low inflation drove demand across product categories, leading to increased sales, deeper market penetration, and enhanced market share. We also saw a successful festive season with robust demand.
During this period, company maintained its focus on risk-calibrated growth across product categories, building a diverse book. TVS Credit continued to drive penetration of existing products, expand product offerings, scale up distribution, while enhancing customer experience and operational efficiency. First nine months, TVS Credit disbursed loans of over 41 lakh new customers, bringing its total customer base to nearly 2.3 crores. The book size is 29,678 crores, grew by 9% over last year Q3. TVS Credit PBT before exceptional items for the quarter is, quarter grew by 21% and is at INR 390 crores as against the last year, INR 321 crores. On Norton, we are building the lineup, which was unveiled in EICMA, EICMA 2025. I'm very sure you would have had an opportunity to see many of these products.
The new Norton Manx and Atlas families position the TVS ecosystem firmly in the premium, in the high emotion luxury motorcycle segment. And it is definitely going to create, for the super premium category of our affluent global customers who value craftsmanship, exclusivity and engineering pedigree, a real, real, you know, special, super premium kind of an experience. We are gearing up, launch of the, Norton products, in the Indian markets as well. We will have a differentiated strategy for Norton. Okay? We will give more details closer to the launch. On, Q4, outlook, I think, all of us know that, we saw very good, growth. In Q3, we saw post GST reduction, industry grew by 20%. Rural grew by almost 19% and urban by about 21%.
The GDP growth for this financial year is also estimated above 7%. This robust performance not only reinforces the underlying strength of strength derived from the domestic market, but also positions India as world's fastest growing major economy, against many challenges in the global landscape. As I told you, this year, the rainfall has been good and the higher reservoir levels are also going to augur increased Rabi sowing, and this should definitely support the rural sentiments. And as you know that, the monetary policy measures implemented by RBI, including the total repo rate reduction by 125 basis points in this year, is expected to improve the liquidity and credit environment. GST reduction definitely is going to support what we have seen in Q3.
So we are expecting Q4 also to be doing extremely well for the industry. On EV, the Vahan, for the first nine months, the industry grew by 14%. And all of you know that, we had some challenges on the, magnets availability, but, now it is better. The availability has become better. And, the Q3, the Vahan EV industry grew by 7.5% over last year, Q3. EV penetration, is slightly lower now, but it is, going to improve going forward. We, have seen very good, growth for TVS in Q3. And we are expecting, with our, products like, iQube doing well and also TVS Jupiter, it is likely to do well.
Commercial vehicle mobility, the TVS King EV and the TVS King Kargo HT EV, very good response in the market, and we are able to also grow here. The Vahan market share, the Vahan market, has gone up in EV L5 category. So this is going to help us. So overall, I think, you will see EV penetration going up in two-wheeler and three-wheeler. Anyway, it has almost come to now 30%-32% in this quarter. So that will go up. On international market, the market is doing well. Q3, we have seen exports from India growing by 23%, and the demand in Africa continues to grow on a quarter-on-quarter basis. LatAm also has grown over last year, and this growth momentum in Africa and LatAm will continue.
As you know, Asia region is also doing well, thanks to Sri Lanka coming back in a big way. Nepal continues to do well. Okay? Europe continued to have challenges. It is not growing. It may take a few more quarters for the performance to improve. And overall, you know, TVS already I highlighted that we have grown ahead of the industry, and we are very confident that this momentum will continue both on the industry side, and we will likely to do better than the industry growth in Q4. So overall, if you look at, thanks to GST, the momentum in India is good. Industry will have a very good growth. Okay? And like Q3, you can expect good growth in Q4 as well. International markets are doing well, and it will continue to do well in Q4.
And thanks to our good portfolio of products and our focus on consumers, quality, new products, and very clear, attractive quality and technology with features, we are confident that we will do better than the industry growth, both in domestic and international markets. And we will. You have seen the highest EBITDA for the company. With top line growth, we will leverage the scale benefits. We will look at more premiumization and better product mix. Our sustained effort on cost reduction will also enable us to continue, and we are confident that EBITDA will continue to grow going forward. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue. The first question is from the line of Chandramouli from Goldman Sachs. Please go ahead.
Hi, good afternoon, and thank you for taking my questions. My first question is just around the industry outlook that you provided. I think in the December quarter, we've seen 20% growth for the industry. Jan to date also on the retail portal seems to be around the mid- to high teens. I think at the previous earnings call at the end of one year, you had indicated you expect sort of this 8%-10% volume growth for the industry in the medium term, back half and medium term. Just want to understand if there's some upside risk to that in your view over the medium term, if you see upside risk to this 8%-10% kind of growth bracket for the two-wheeler industry.
Definitely, you know, the GST is playing, and all of us should know that it is not only in two-wheeler. There is a good basket of products wherein the consumers have got the benefit of GST, so it's all playing out. I'm pretty confident that Q4 also, you will see anything upwards of 15%, you can see in Q4, which is, according to me, one of the best growths what we have seen. So we are very positive about the Q4 growth. So year as a whole, if you look at it, because you know, the first half has not been so great, it was only 2% growth. And year as a whole, you will see somewhere around 9% growth, but exit is excellent. So that is going to help us the two-wheeler industry this year.
Got it. That's helpful. My second question is just around commodity inflation. So just trying to understand, we've seen inflation in the precious metals, little bit on copper, aluminum as well, and now, there seems to be a reintroduction of the safeguard duties on steel. In the past, TVS has passed on some of the commodity inflation with judicious price hikes. So just want to understand, what are the offsets available to the company to manage the commodity inflation? And have we taken any price hikes, in the December quarter as well as for March quarter to date?
You are right. I think there are increases in aluminum, copper, zinc, platinum, palladium, rhodium. I think, I think that you will see in this quarter. And we will, we always look at a combination of, you know, with our top line growing. The strength of the company has been when the volume is growing, we are able to get the scale benefits, and we are also able to drive our cost down program. And we have been very prudent, we keep looking at price increases. And if you look at recently, we have taken up about 0.2%, 0.3% price increases.
So this is a kind of a constant journey, because we definitely want our growth momentum to continue, but we want to mitigate the journey with a combination of scale plus cost reduction, plus product mix has definitely helped us, and some appropriate price increases. So this will be the strategy even in this quarter.
Got it. That's helpful. Just lastly, I was giving question, if you could share the international business revenues and the spare parts service, please.
IB overall, revenue for this quarter is about INR 2,909 crores. And, spare parts all put together, about INR 1,183 crores.
Got it. That's helpful. Thank you very much, and all the best.
Yes. Thank you. Thank you. Thank you.
Thank you. The next question is from the line of Pramod Kumar from UBS Securities . Please go ahead.
Yeah, thank you for the opportunity, sir. My first question pertains to the breakdown of the industry growth. If you can just help us understand, what are the categories across both urban and rural you are seeing volume growth being driven from? Because when you look at the Vahan data, it predominantly suggests that players with skew towards premium portfolio and scooters are doing well. If you can just help us understand how the product categories are doing on the ground. And within that, in rural, are you seeing better traction for premium and scooters after the GST cut, as the household have better savings in their hands or better disposable income in their hand? Are they being better off gravitating towards scooters? If any other qualitative color which you want to share on the consumer behavior, sir?
Scooters have really done well. While the industry has done well, I think one category which has done extremely well is scooter. You remember, I always believe that scooters with ICE plus, we should always add the EV. We are close to now 40% category share of overall two-wheeler industry. This is exactly what I used to say in the meeting, that scooters will grow faster than the industry, and that is exactly what is happening in the industry today. Other important thing, we should look at the premium and the super premium is growing faster. Okay? The executive category of motorcycle is also growing. I think what is happening is the entry-level seg segment is not growing as much.
But if you look at urban, rural, urban is about 21% and 19% rural. So rural is also doing well. I don't think we can say that rural is not doing well, but urban is slightly ahead.
Within rural, now is the traction for scooters and premium getting better, sir, after goods take up?
See, overall, scooter has to do well, and the premium and the super premium has to do well.
Yeah.
Definitely, in the rural also, scooters are doing well. Thanks to the infrastructure, especially roads and road connectivity in many of the rural markets, I think this is definitely helping, definitely helping the scooters and the premium and super premium to grow.
I said.
Of course, the support of retail refinancing.
Okay. No, another thing is related to your own supplies, because we did hear about massive shortages during the festive. Even today, if we do channel check, we get a feedback that there are some short supplies on scooters and new launches. If you can just help us understand where are we on the capacity side? What are the plans we have for improving capacity and improved availability of your products, so that there is no impact on the retail market share side? And just help us understand what are your plans to ramp up the supplies from where we are today.
See, one thing, thanks to all the customers, our products are in very good demand in the market, thanks to our customers. And also recently launched products are also in good demand. You know, end of December, maintenance of, plus, a few holidays in, January, there is a little bit of challenge, because end of December, there are, company holidays on maintenance off, which is very important for the factory. And, then you have the New Year day and then, Pongal. And, you know, these, these are some challenging times where, there are some, requirements of, you know, company holidays. Barring that, there are no challenges, and, for taking capacity increases, it takes about two months to three months. And fortunately, we have been very proactive in investing behind that.
We always believe that the dealer should keep only 21-30 days stock, because we want products to be fresh to the customer. There may be a few dealers where, you know, they have to plan little bit better, but we are fully taking care of the supplies for the market, and we will continue to do that. Of course, in the EV side, we had a setup setback because of the magnet availability. We tried our level best.
Now it is, it is recovering. I'm, I'm, I can tell you that it is recovering, and hopefully by another month, you will see full supplies of EV also into the market. So overall, I think, we have been at it in terms of both, managing, the capacity, delivery, and, and, thanks to the kind of, growth in the market. I think it's a, it's a balanced journey.
Is there any thoughts on the export market, sir? Final question.
Export is also doing well. You have seen, and we are expecting Q4 also should do well. Like I said last time, you know, Africa, the number of, the last year had a bad year, but industry has done. It has come back well, and we are growing ahead of the industry. I'm very sure Q4 also, you will see this kind of an industry growth, and we will outperform the industry. Because many markets, we are doing extremely well, and we will continue to do the same kind of focus in Q4.
Thanks a lot, sir. I will get back in the queue. Best of luck.
Thank you. The next question is from the line of Binay Singh from Morgan Stanley. Please go ahead.
Hi, team. Thanks for the opportunity. Congratulations for a very good quarter. If you look at other expenses in the previous quarter, we talked about three one-offs in other expenses. But in this quarter also, the other expenses growth seems to be ahead of volumes. So any, any one-off or anything you would like to call out in that?
See, the other expenses, most of them are related to the variable expenses related to packing, freight due to the volume growth. The only one of the things little bit higher this year in this quarter is marketing expenses, because you know the number of products we launched. Okay? We had about INR 60 crores of additional expenses because of that. Otherwise, if you look at you know the other expenses, one is packing, freight in line with that. Then marketing, I already told you. And new technologies, R&Ds, we always you know we put our investments. Okay? And you know this quarter we have the maintenance, the annual maintenance, so we spend about INR 15 crores, which is as per planned. So overall, there is nothing unique other than the launch-related marketing expenses.
Yeah, right. Right. And then secondly, on the commodity side, we've seen commodity upcycles in the past also, but this time it's coming after the GST cut, where prices dropped. Do you think it'll be easier for OEMs to pass on commodity, as price increases in this cycle, as the prices dropped quite sharply and customer appetite or affordability is better?
I think it is a, it is a balanced journey. I think definitely, I think, when we fully passed on the GST benefits to the customer, that has helped the, for us to also grow and the industry also to grow. So it is not easy to just increase prices. I think as a, as a responsible company, we want to give better value to our customers. We look at, that's why we invest behind variants, new technology, new attractive features. Otherwise you cannot hold on to the demand higher than, you know, whatever you have done. So this is a, this is a very, very balanced journey, and we have to also understand that, when you give better value to the customer, they will like to buy the vehicle.
So, we have to look at, you know, whenever the material cost goes up, we have to have a balanced effect, and that's why when you grow the top line, you can get the scale benefit and premiumization. I think company has been always focusing on the premiumization, so better mix, you are able to focus. And scooters doing well is also another important strategy. So we are, we are very focused on not increasing prices. We want to give better value to the customer, and, yes, wherever there is opportunity, we want to take little bit price increase.
But, sir, just lastly, precious metals have been the one which have seen the most inflation. Any number you would want to share as percentage of sales, how big that is, or how do you see that? Because we've seen very sharp increases in platinum, palladium and all.
See, overall, we have to look at it, because I don't think, because when the customers looks at it, they want to look at as a product. So there has been increases, you know, in aluminum, copper, zinc, everywhere. So, platinum, palladium, rhodium, and, with BS6, the contents are little higher in these products. So I think as a total, we look at, you know, what is the impact, and impact may be about 0.2%-0.3%. I don't think it is huge. So that's why I said, how do we make sure that we are able to increase the customer demand? How are we able to look at growing the top line? How are we able to-
Right.
-look at the mix? Okay, and that should be the focus, according to me. And, we can also look at a small, passing on to the market in terms of price increase, appropriate, kind of thing. So that, this is the combination of strategies we use.
Right. Right. So, so, sir, in that sense, the 2% price hike you've taken and the 0.2%-0.3% increase that you're talking about in commodity, in a way, the equation looks balanced, in that sense, right? That is a fair way to conclude.
Yeah. Yeah, maybe see, the material cost increases also when scale is done, that also supports the suppliers, you know. When they have better scale on the same platform. That's why I always believe that top line growth has to be very, very robust. And if you can also look at, you know, same platform, then the suppliers will get huge benefits. So it is a, it's a kind of win-win, win-win for everybody.
Great. Great. Thanks, sir. Thanks.
Thank you. The next question is from the line of Gunjan from BofA. Please go ahead.
Yeah, hi, thanks for taking my question. Sir, I just wanted to go back to your comments on the industry, domestic industry growth. You know, you're clearly a lot of confidence on Q4, and, you know, you mentioned shortages in the market as well. But, if I were to just, you know, think of fiscal 2027, you know, any thoughts you would like to share, that, you know, do you expect this sort of momentum to continue going into fiscal 2027? Is it fair to say that we can have another 8%-9% sort of growth here in, in fiscal 2027 as well? The reason I ask this is because we're not seeing this sort of demand recovery in some of the other sectors. So is auto just about two-quarter pent-up demand and it starts to come off?
I mean, any, any thoughts from your side will help us think better about the cycle.
Gunjan, I will answer in two steps. Okay? First, I never said there is shortage for products of TVS in the market. I said there were challenges in EV, iQube, and now recently launched Jupiter, primarily because of the magnet availability. Now that is also easing out. So from capacity point of view, we are also taking proactive action. So that is first point, okay? It is Pramod who asked, there is a shortage in the market. I think it is for the dealers to plan, and we are here to support them with the products on time. Now, coming to the growth rate, I'm very confident that Q4 also you will see the benefit, because GST got implement, I think, third week of September or fourth week of September.
So you will see the first half of next year is also going to be very good, because the benefits will come into the industry. Second, I want to give a little bit a long-term answer. With the kind of infrastructure getting built in India, with the road connectivity, rural, urban, semi-urban, getting better and better connectivity. And please understand the mobility needs and given the challenges on the public transport system, and I always say that, you know, the self-employed is a good proportion in India.
Given that the best segment is two-wheelers, because customers can afford it, customers can definitely use that for mobility, as well as the 50% of self, you know, income group. So overall, I'm a firm believer that 8%-9% as a CAGR, you can look at on a long-term basis, okay? So second half of next year also, I'm very sure it's not like first half. You will see many of these things getting implemented in India. Overall, the GDP is likely to grow. So with that, I think you will see a robust growth in the two-wheeler, even 2027. I don't want to give some projections as of now. But overall, this is my preliminary thinking.
Got it. No, that's helpful, sir. So the second question that I had was, again, on Norton. You know, congratulations on the unveil of the product. Just wanted to hear your thoughts on, you know, how do we now think about the investments in the business? Because we've, my understanding, we've also invested, almost INR 900 crore in subsidies in this quarter. So if you can give us some, you know, some color on how do we see the investments going forward, and, how soon we sort of also start to see the losses come off. So some color on Norton, you know, investments and the, the breaking, breaking even or whatever loss reduction in, in the subsidies.
See, Norton, I'm extremely happy the products are getting ready, okay? We are now preparing for you. I'm very sure all of you, whoever has visited the Milan show, you would have seen the products. These products are going to hit the market in 2026, this year. You will see the growths coming, and they are super premium, and it is going to definitely delight the customers globally. So once we have a very clear plan of action to go to the market, we will definitely share with you. But this is a very, very important year from the Norton point of view.
Now, coming to investments in Norton, you know, the first year we have to put the products, and we have to support it with marketing, because we want to build the brand in a very, very strong way. We will definitely invest behind the right areas on technology and marketing, okay? Now, coming back to the second question on INR 900 crore, you know, the delta this quarter has been TVS Credit Services. We have invested about INR 200 crore. And for the pre-launch or pre-marketing of Norton, we have given another INR 60 crore-INR 70 crore additional during last quarter, including the EICMA show, okay? EICMA Milan show. So I think these are all very measured delta. And also the ION Mobility, PT TVS Motor Company Indonesia project, we have invested about close to INR 100 crore.
So, investments are in the right direction, in the right products. At TVS Credit Services, you know the kind of book size we are growing and the profit, it is generating. So we will look at the investments most appropriately based on where the strategic focus is there for the company.
Sorry, sir, just a clarification. You mentioned INR 60 crore incrementally in Norton, but the total invest- Like, I'm just trying to get the breakup of this INR 900 crore. Would it be?
No, this is compared to last quarter. Last quarter, last quarter is what I said.
Okay. So incrementally, INR 60 crore more in Norton and INR 200 crore in TVS Credit is the incremental delta from last quarter. Is that understanding?
Correct, correct, correct. Correct, correct, correct, correct.
Got it. So last question. You know, just very, you know, from a mix perspective, premiumization is something you said certainly helps us from a margin management cost mitigation.
Yeah.
Scooters, the way it is growing, how do I think about the margin profile of scooters versus the, you know, versus, let's say, bikes or mopeds? Any color you can give with scooters at parity, is it premiumization within scooters that's helping, you know? Just this quick one on that.
See, we focus on the customer, and we focus on technology and features, okay? And we want to look at overall portfolio. While I said product mix is very important and premiumization is very important, and we are focusing on that, okay, we have to look at the customer, customer segment and try to be, you know, leading many of these segments. So that has been our focus, okay? We always look at the total portfolio contribution, okay? We don't look at segment-wise, okay? Segment-wise is important, I agree, but we want the overall top line to grow ahead of the industry. We want to look at how we can increase our premium product category share to go up. Also, scooter category share, how to go up.
So we do interventions with respect to products, variants, and making sure that they grow faster than the industry.
Okay. Got it. Thank you so much, sir.
Thank you. The next question is from the line of Sonal Gupta from HSBC Mutual Fund. Please go ahead.
Hi, good afternoon. Thank you for taking my question, sir. So first question I had was on Mexico. Could you sort of tell us what's the impact of the new duties? How much are we paying currently, and what is our exposure to the market?
See, first of all, we are now building Mexico, okay? As of now, while there are some impact on the duty, we are also looking at local localization. So we are not seeing a serious impact at this point of time, because the volumes are low, and we are also trying to, like, increase our local content. So possibly it may take about couple of months' time. So it is not going to put huge impact on TVS Motor.
Okay, Sir, it's like 10% of volumes or of export volumes ?
No, no, no, much, much lower. Much, much lower. Much, much lower.
Oh.
Very small.
Okay. Got it, sir. Okay, that's helpful. Sir, the other thing was, could you tell us what are the EV three-wheeler volumes for the quarter and the EV revenues overall for the quarter?
EV revenue overall means you want including two-wheeler, EV?
Yeah.
Yeah. EV, yeah, three-wheeler volume, let me just. Just a minute. EV must be around, I think you have to give me one minute, okay?
Sure, sir.
Around 8,500 to 9,000, because every month it has been increasing. So around 8,500 numbers in this quarter.
Okay, sir. And revenue for EV?
I'll get back because I have to check.
Okay. Got it, sir.
Yeah, yeah. Tell me?
Just, just a related question was on, like PLI, we've been previously indicating about a 50 bp s benefit because of PLI. Would that have gone up in this quarter or it's still at those sort of-
A little bit. It has little bit gone up. It is about 0.7.
Okay. And I mean, like, if I go back previously, I think almost 8%-10% of our revenues are coming from EVs. And, if you take a 13%-14% sort of PLI benefit, then it should be almost like 1.3%-1.4% of revenue. I mean, like, 730 basis points. So I, I mean, like, so the gap I understand to some extent it is because of some of the suppliers who are getting those benefits and, therefore you're not accruing those. But still, is there a scope for increasing this or what is the gap here that we can sort of improve this further?
Yeah. First of all, first of all, thanks to government on the PLI, I think it's, you have answered in your question itself. It's a combination of the company and some of the suppliers getting the benefit overall, okay? For us, it is about 0.7.
We have not missed any opportunity.
And we have not missed any opportunity in securing the PLI benefits from the government, okay? Number two, I think our endeavor is to focus on delighting the customer, whether it is iQube, whether it is TVS Jupiter or TVS King. And as you know, our numbers have been growing ahead of the industry growth. So definitely this is going to help us to improve the EV profitability going forward. So systematically, we always believe in customer and then top line growth. That will result in all the growth of the bottom line.
Right.
Same principle what TVS Motor uses, even in EV we use that.
Sure. So, so just trying to understand, so whole EV portfolio is now accruing PLI, or is there some portion which is still not accruing any PLI benefit?
Yeah, we are getting PLI for the, for the-
Jupiter as well?
There are few products where, you know, you know, above certain price, you know, there we are not eligible because of the, as per the, you know. So that volume is our very small volume.
Got it, sir. Okay, sir. Great. Thank you so much. Thanks, sir.
Any more questions?
Thank you. The next question is from the line of Kumar Rakesh from BNP. Please go ahead.
Hi, good afternoon, ma'am. Thank you for taking my question. My first question was around the investment and CapEx plan for the year. At the start of the year, you had spoken about CapEx target of INR 1,600 crore and investments of INR 2,000 crore. In the first half, we had done CapEx of about INR 1,000 crore, and in three quarters we have done investments of about INR 2,000 crore. So are you looking at revising those targets that you had for this year?
The CapEx will be around INR 1,700 crores or slightly around that, because we are also now looking at increasing some of the areas capacity, given the kind of growth what we have seen. Okay? Investments around INR 2,900 crores overall.
Got that. And-
So far we have invested. Yeah. Yeah.
Right.
Sorry, tell me? Tell me.
Just a clarification on the earlier to Gunjan's question. You last quarter hadn't shared the Norton investment. So if you could just share what was the investment last quarter over which there is an incremental INR 50 crore-INR 60 crore?
I think last quarter is about INR 240 crores, and this quarter about INR 290 crores, Norton.
Perfect. Thanks a lot. My second question was around your commodity cost. You spoke about 0.2%, 0.3%. Is that the total commodity basket impact or only the precious metals which we are talking about? And-
Total, total. Total may be about 0.4%, at best.
Okay. And has all of that already been flowing through your material costs, or there's something which is yet to come through? Because your production last quarter was lower than your whole sales, so some of the sales you would have done would be based on the earlier period.
No, some are, some are in Q3, some are in Q4. Some are in Q3, some are in Q4, okay? So this is where I said, you know, we want to look at very closely the top line and look at growing faster than the industry, so you'll get the scale benefits. And some areas we also increase prices. For example, early part of this quarter, we have taken about 0.3% price increase. So it's a, it's a, it's a balanced review, you know, what we look at.
Got it. That's very helpful. Thanks a lot.
Thank you. The next question is from the line of Patvir Singh from Nomura. Please go ahead.
Yeah, good afternoon, sir, and congratulations on a very strong performance.
Thank you.
Question is on the current currency. What is the realization we've had for the quarter? Is there some hedging we are calling or we are realizing as per the spot rates?
No, we have a hedging policy and we strongly follow that. It's a very robust policy where we cover the net exposure over a period of time. For the current quarter, I think the realization is around 88.
Okay. So because rupee has been depreciating further, so, as your hedges roll-
Probably you may get, as per the policy goes, benefits will accrue over a period of time. It's a policy where we cover the next few quarters. Not few quarters, few weeks.
Okay, and we are able to hold-
Well, weeks, yeah.
Thanks, sir. And we are able to hold on to-
Yeah, yeah, we are able to.
Okay.
Yes, yes, yes. Yes, yes.
Uh, the-
Yeah, yes.
Second question was on electric vehicles. You know, we launched the Jupiter. How has been the response? And the customer profile difference between iQube and Jupiter, if you can give some color over there? And also on the EV profitability journey, where are you, when can, at what volume level do you turn EBITDA, breakeven? Some color.
See, first on Jupiter, this is, you know, the product differentiation. You know how it is priced, so it is basically to give it to those set of customers who want a lesser range, and they can look at this as a differentiated product, okay? It's too early to really come back actual usage and how it is performing, but so far, whatever we have seen, the markets where we have launched, we have not launched in all India. The demand is excellent and we are ramping up now. First we'll cross the 10,000 numbers per month, okay? And the good news is iQube is also growing, Jupiter is also growing. So from the customer point of view, excellent reception for both the products in the market, that's number one.
Overall, it is growing ahead of the industry, okay? And, you know, the, on contribution, we are positive, and we are becoming better and better quarter-after-quarter, because that is our focus. And like I said, overall, when we look at the EBITDA margin, I'm pretty confident that while the volumes are growing, I'm very confident that this EV will also become EBITDA positive and, it will, it will also grow forward the overall PBT level. So the focus is fully on the demand creation, growing the market ahead of the industry, increasing the contribution very systematically, okay? Then we are pretty confident that, it will also start. And overall, please look at our EBITDA journey as a company. You know, this quarter is the highest, 13.1%, which means EV is also doing well. Please understand.
Yeah, sure, sir. Sir, can you give us the capacity numbers for overall and for EVs that we have currently?
EV, we are producing about average 30,000-32,000 of iQube, and as of now we are producing about. We are coming closer to 10,000 of Jupiter.
Sir, any, like, any capacity number you have that you are planning to have for?
We're, we're reviewing that for next year. We are reviewing that for next year, and we are also investing. Possibly in the next call, I'll be able to give you the kind of, increases we are looking at. But we are definitely investing in capacity because, this is something which is, growing.
Sure. And, sir, just lastly on the investments, we have increased the guidance to INR 2,900 crores from INR 2,000 crores. Where is the additional investment going towards?
Investments. Investments, one is on Norton, another one is on TVS Credit Services. Okay?
No, overall, overall.
You know, we have also invested behind the ION project, which is a part of the PT TVS. So, and the e-bike business. Okay? So overall, these are the, these are the areas, these are the areas we have done. And we are also, you know, strategically we have invested in Dubai for international market. I think all this we highlighted in the last three quarters, three quarters. Okay, this is primarily the for more focus in the international and growing the international market. So these are the areas where we have invested.
Sure, sir. Thank you, and wishing you all the best.
Thank you. Thank you.
Thank you. The next question is from the line of Raghunandan from Nuvama Research. Please go ahead.
Thank you, sir, for the opportunity. Congratulations again for a strong quarter once again. Sir, firstly, exports have witnessed a robust growth, more than 35% on a YTD basis. Within exports, how do you see the potential for Jupiter model in future? In FY 2024, Jupiter used to be 60,000 units. How do you expect the ramp-up ahead?
See, Jupiter is overall, much ahead of the 60,000, okay? If you, if you look at, Jupiter alone now, we are doing on an average. You're asking international or domestic?
International, sir. Export market. I was just trying to understand how can be the potential in future?
Yeah, potential in future for, see, markets like Asia, some markets in Middle East and some markets in Turkey, okay? A few markets in Africa, very few markets in Africa, some markets in LatAm, also ASEAN. So I think Jupiter is a great brand, and what we are trying to look at is each of these markets, we are trying to leverage by marketing this product, its advantages. So it will grow. This year also it will grow. Overall, scooters will grow in international market. I may not be able to put a number to it, but fortunately, we have the product, we have the capacity to give it to the market.
Sri Lanka coming back in this category is a big, big advantage, because Sri Lanka is a big scooter market, as you know, and Jupiter is one of the key players in Sri Lankan market.
Got it, sir. Thank you. And on the commodity side, would you also have hedges, sir, which can delay the impact of the recent commodity price increases?
We closely monitor here, because this is something, we also take advice from hedging agencies, and we very closely work with those people.
We don't hedge.
We are not hedging at this point of time. We take advice. That's what I said. Okay? According to me, you know, we have to closely monitor the situation and then work. But what is most important is, you know, you have to improve the scale. Scale can help you to absorb, then you have to look at category by category, and we can look at what kind of overall, you know, value you can give to the customer, and that will give you an opportunity to look at some small price increases. I'm not saying fully you can pass on, but you have to look at on a balanced way.
Got it, sir. So scale, price hike, product mix improvement, INR depreciation, and-
Most importantly-
Vendor.
Product mix, see, scale and product mix gives a huge benefit to even the supply chain. You know, they are also able to, same platform, when the volume goes up, they are able to also cut down the cost. Because that's why I said win-win can come only when you, you, you are able to look at the overall scale going up, the revenue going up, numbers going up. So that is very, very critical.
Q4 gross margin, you should be able to maintain, sir, as a combination of factors despite the commodity increase?
I don't want to give any guidance. I can, I can only tell you that I already gave you in my opening remarks, you have seen our performance in quarter-after-quarter. The same performance will continue, because we don't want to give any guidance on, gross margin. But I can tell you, we are confident about growing ahead of the industry. That is going to help the company and our strategy of looking at the product mix, maximizing the scale benefits, also continued effort on our cost reduction. These are all going to help the EBITDA journey.
Got it, sir. And, last question, sir, on 2026 should see the launch of Norton motorcycles that you had shown in EICMA. And apart from that-
Yes.
You had also showcased that M1- S electric maxi scooter and TVS X, which is the electric motorcycle. What can we expect on the electric side, sir, for 2026?
See, the strength of TVS Motor is very strong R&D and new product development capability. We look at the customer very closely. I think those are all I would like to say that, certain, products and the concepts, what we had displayed there. Okay? Closer to the launch, I'll tell you the timeline. At this point of time, I think we believe in, our strength of, R&D and new product development capability. Most importantly, we want to focus on the customer and delight the customer. That strategy will continue as a company.
Wonderful, sir. Any date for the listing of preference share? That's all from my side.
What is that? Sorry, sorry.
Any date?
No, no, the listing is still taking time. We are closely following up with SEBI. We will continue to follow up more closely. That's the status now.
Got it, sir. Thank you very much.
It's not in my control. We are not able to give a date. Yeah, I think we should close this now. It's
Can we have the last question?
Sure, sir.
Yeah.
The last question is from the line of Himanshu Singh from BNP . Please go ahead.
Hi. Thank you, sir, for the opportunity. Sir, I just wanted to understand, like, given the commodity price increase, which we have seen in Q4, what is the impact you see, like, without the price increase, just the impact from the commodity increase on margins?
I think, I think, this is the fourth time or fifth time. These commodity prices, plus, minus, are likely to happen, you know, in every quarter, okay? Sometimes we have seen softening, sometimes we've seen marginal increases. Like I said, the strategy of the company is always to look at delighting the customer and giving the best value to the customer. And thanks to the industry, it is doing extremely well, and we have been, thanks to our products and our thanks to our customers, we have been also growing very well on the top line.
Continue to grow the top line, continue to get the benefit of scale, continue to work with the suppliers and look at what kind of cost reduction we can bring in, and very clearly work on other cost reduction initiatives, and wherever possible, without hurting the customer, increase the prices wherever it is possible. Okay, so this is a continuous and a constant journey company looks at it, okay? Most importantly, we look at our EBITDA journey. You know, we have to look at whether are we improving quarter-after-quarter on our EBITDA journey. Okay?
Awesome. Thank you so much.
Thank you. Thank you. So I want to thank everyone. You have seen the Q3 performance and the accelerated growth momentum, and the kind of performance on highest revenue, EBITDA, and profits. We are extremely happy about the revenue on INR 12,474 crore. And I'm with the best-in-class quality, and we are very focused on consumers and the kind of strong portfolio of brands like Apache, Ronin, Jupiter series, iQube, Jupiter, Raider, NTORQ, HLX series, Radeon, TVS King, TVS King Kargo, both ICE and EV. I think we will grow ahead of the industry, and thanks here to all the customers, both in the domestic and international market. We will continue to leverage scale benefits. We will focus on further strengthening our premiumization journey, consistently look at the consistent the material cost reduction.
I think this will be the focus to further improve our EBITDA journey. As you know, we have been consistently performing on top line, and we have been also consistently focusing on growing the EBITDA quarter-after-quarter. Thanks to every customer, and we are confident that company will continue to grow better and better. Thank you. Thank you, everyone.
On behalf of BNK Securities Pvt Ltd , that concludes this conference. Thank you for joining us. You may now disconnect your lines.