TVS Motor Q2 FY27 Earnings Call: Revenue Up 44% to Record, Credit Demerger in FY28 (TVSMOTOR)

TVS Motor Company Ltd held its Q2 FY27 earnings call on October 28, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Highest-Ever Quarter on Volume, Revenue and Profit

• Record quarter across the board — Q2 FY 2026-2027 was TVS Motor's highest-ever quarter for volume, revenue and profits: volume 1.9 million units (+27% YoY vs 1.5 million), revenue Rs.17,103 crores (+44% vs Rs.11,905 crores), EBITDA Rs.2,219 crores (+47% vs Rs.1,507 crores), PBT Rs.1,865 crores (+52%) and PAT Rs.1,377 crores (+52% vs Rs.904 crores).
• EBITDA margin of 13.0% — up 30 bps YoY from 12.7% in Q2 FY 2025-2026, despite commodity price increases impacting Q1 and Q2 FY 2026-2027 that management partially mitigated via price increases, cost reduction and product mix optimization.
• H1 FY 2026-2027 operating revenue of Rs.30,999 crores — +41% vs Rs.21,986 crores in H1 FY 2025-2026; H1 PBT Rs.3,454 crores (+52%) and PAT Rs.2,551 crores (+52%).
• Housekeeping items — Q2 FY 2026-2027 spares/parts revenue was ~Rs.1,314 crore and exports revenue was Rs.4,378 crore.
• Cost pressure flagged — an analyst noted one cost head up ~20% YoY and employee cost up ~33% in Q2 FY 2026-2027; management said Q1-Q2 material cost increases are unlikely to repeat in Q3-Q4 FY 2026-2027, with hope of stabilization or small softening in Q4 FY 2026-2027.

Ahead of Industry in Every Segment; International at Record

• Outperformance across all categories — Q2 FY 2026-2027 YoY growth vs industry (per management): domestic 2W ICE +16% (industry +10%); international 2W ICE +33% (industry +27%); total 2W ICE +20% (industry +14%); domestic 2W EV +129% (industry +84%); 3W +47% (industry +26%).
• Domestic 3W (ICE+EV) volumes of 26,300 units — +65% YoY vs 16,000 units, against industry +23%; industry 3W EV penetration was ~44% in Q2 FY 2026-2027 and ~48% in September 2026.
• Record international volumes of 5.39 lakh units — +35% YoY, led by Africa with LATAM and Asia contributing; international EV 2W sales of 6,930 units vs 1,726; management expects much higher TVS 3W growth in Q3 and Q4 FY 2026-2027.
• Industry 2W growth (ex-EV) nearly doubled — from ~10% in Q1 FY 2026-2027 to ~20% in Q2 FY 2026-2027, taking H1 FY 2026-2027 industry growth to ~15.8%.
• Scooter franchise strength — Jupiter category share (including EV) at ~41% in India; Jupiter crossed 9 million and iQube 1 million cumulative units in Q2 FY 2026-2027; ICE scooters holding at ~32-33% share with EV adding ~9-10%.
• Q2 international launches — TVS Orbiter and Entork 150 (Nepal); King EV Max and Orbiter (Sri Lanka); Apache RTR 160 4V, RTR 200 4V TFT, RTR 310, RR 310 (Sri Lanka); Apache RR 310 and iQube (Kenya); Raider (Egypt); Callisto 110 (Indonesia).

EV Ramp Ahead of Demand; Margins Improving but Undisclosed

• EV capacity at 60,000-65,000 units — combined domestic plus exports as of Q2 FY 2026-2027; the next expansion to about 80,000 is already planned with activities underway (period unspecified).
• Supply constraints acknowledged — analyst Nitin (Axis Mutual Fund) flagged that EV demand is well above reported numbers; management noted the Indian two-wheeler EV industry grew ~75% in H1 FY 2026-2027 and TVS had capacity planned ahead of this growth.
• Rural EV push — TVS has started pushing EVs in rural markets; in H1 FY 2026-2027, rural two-wheeler EV growth in India was slightly higher than urban.
• EV margins improving "quarter after quarter" — but management declined to disclose EV-specific gross margin or EBITDA figures (2W & 3W, ex-PLI), pointing instead to overall company top line, EBITDA and PBT growth.
• Orbiter at ~20% of domestic electric 2W mix — within a year of launch (as of Q2 FY 2026-2027) and now attracting the PLI incentive; availability has been raised, exports have begun, and capacity is being enhanced in Q4 FY 2026-2027.
• Industry EV penetration (September 2026) — 2W at 11.6% overall and ~22% in scooters; 3W ~47%; momentum expected to continue into Q3 FY 2026-2027.

Mirror-Image Split; Completion Expected in FY 2027-2028

• Board approved demerger of the consumer finance undertaking — including the investment in TVS Credit Services and certain non-core investments, already reported as a separate "finance undertaking" in the balance sheet, into a separate holding company; the scheme does NOT transfer the business to TVS Credit Services.
• Mirror-image shareholding — existing TVS Motor shareholders (including promoters and public) receive the same number of shares in the new entity; both companies will be listed on the same exchanges; TVS Motor will retain no stake in the demerged entities; no valuation exercise is involved.
• Completion expected in ~8-10 months from the call date — i.e., during FY 2027-2028, subject to shareholder approval, regulatory approvals and the NCLT process; the appointed date is July 2027 (FY 2027-2028), with assets valued as on that date.
• RBI-mandated NBFC consolidation in process — the two NBFCs (TVS Credit Services and the promoter-level/TVS Holdings NBFC) have requisite board approvals received, regulatory approvals awaited, with completion expected by March 2027 or April 2027.
• TVS Credit Q2 FY 2026-2027 — book size Rs.33,818 crores (+22% vs Rs.27,807 crores); PBT Rs.330 crores (+19%); loans disbursed to 14 lakh new customers (base ~2.7 crores); 65,000+ touch points; net worth Rs.6,500 crore before a proposed Rs.1,200 crore equity infusion ahead of the demerger (period unspecified), depending on capital requirements.
• Rs.711 crore Q2 transaction was secondary — a purchase from an existing shareholder, not a primary infusion; CFO K. Gopal Desikan could not confirm the valuation/multiple at the call and said he would check.

Norton Rollout Underway; E-bike Losses Curtailed

• Cumulative e-bike losses of ~Rs.1,300 crore — over the past 4-5 years, flagged by Kumar Rakesh (BNP Paribas); the fair-value question on these investments was not directly addressed in the exchange.
• Q2 FY 2026-2027 e-bike loss lower than Q1 — per CFO K. Gopal Desikan, driven by Norton brand-related expenses with launch-related costs slightly higher than the previous quarter; losses on non-Norton e-bike businesses (Swiss e-mobility, the Go) have started coming down in FY 2026-2027 after remaining elevated over the last two years.
• Norton rollout — Maxar Atlas rollout underway across European markets with dealers live in UK, Italy, France; Germany, Spain and India to follow; India launch expected in the forthcoming months; preparations for the US underway; new models to be announced at EICMA next week (Q3 FY 2026-2027).
• All Norton spend characterized as investment — CEO K. N. Radhakrishnan cited launches, media, dealership network and the Solihull UK facility setup, with the journey begun at EICMA in FY 2025-2026; the Q2 FY 2026-2027 investment in the Singapore entity is entirely for Norton.
• PLI benefit at ~1.3-1.4% of turnover in FY 2026-2027 — the company crossed the 10,000 cumulative milestone as of Q2 FY 2026-2027, qualifying for the additional 2% boost rate under the government scheme; management said it is on course for the government PLI scheme's quarterly slabs in FY 2026-2027.

Outgrow the Industry, but Base Effects Bite in Q3

• Q3 FY 2026-2027 industry guidance: "good single-digit" growth — management flagged a high base from very strong industry growth in November-December of Q3 FY 2025-2026 and explicitly cautioned against extrapolating H1 FY 2026-2027's ~15.8% industry growth; base-effect headwinds from the GST rate correction at end-September 2025 (Q2 FY 2025-2026) persist.
• Q4 FY 2026-2027 outlook to be assessed at end of Q3 — management noted Q4 FY 2025-2026 was extremely strong for TVS; better demand visibility expected within a couple of weeks after Dasara and Dhanteras (November 6, 2026).
• Confident of outgrowing the industry in Q3 and Q4 FY 2026-2027 — in both domestic and international markets, supported by the portfolio and capacity enhancement; management expects TVS products to do well in FY 2027-2028 as well.
• Dealer inventory discipline — maximum 30 days of dealer stock with many dealers below 21 days in Q2 FY 2026-2027, alongside pull models and supply-chain health.
• Capacity expansion — two-wheeler capacity to cross more than 8 million and three-wheeler capacity to reach almost 0.4 million soon (period unspecified); FY 2027-2028 capacity planning is underway now given strong market pull; a big FY 2026-2027 capex program is underway as planned.
• Scooter category upside — management expects the combined ICE+EV scooter category share (currently 41% as of Q2 FY 2026-2027) to reach 45% in FY 2027-2028 and possibly 50% in a couple of years (period unspecified).
• Investment priorities for FY 2027-2028 — predominantly new product development, with Norton investments based on the product plan; management may provide guidance on FY 2027-2028 and FY 2028-2029 investment numbers next quarter (Q3 FY 2026-2027).