In probably a first, Chennai-based TVS Motor Company on Wednesday revealed that the price hike it took in January across its product portfolio was meant for compensating its 1,150 dealers and around 3,000 sub-dealers which were affected due to factors like goods and services tax (GST) rollout.
The company further claimed that it is increasingly facing headwinds from rising material costs, hike in import duties, wages, etc, as a result of which it is continuously monitoring the opportunities to increase the price.
In a conference call with analysts, CEO K N Radhakrishnan said that the dealer margins are reviewed every three to four years, and the initiative in January was a way to help them manage their business well.
The company has plans to invest around Rs 700 as capex this fiscal to enhance the technological capabilities, production capacity, apart from meeting other regulatory and safety requirements, he added.
For the quarter ending March 2018, TVS posted 30.63% increase in profit on the back of higher vehicle sales in domestic and overseas markets. Total revenue excluding excise duty/GST jumped 40.4% to Rs 3,992.76 crore as overall sales rose 31.7% to 8.89 lakh units during the quarter.
Total exports of two-wheelers and three-wheelers increased 45.3% to 1.61 lakh units, with three-wheeler sales rising 90.7% to 0.29 lakh units.
For FY2018, the company’s standalone profit was at Rs 662.59 crore as against Rs 558.08 crore a year ago, a growth of 18.72%. Standalone revenue from operations for FY2018 was at Rs 15,472.88 crore as compared to Rs 13,190.06 crore in the previous fiscal.
The shares of TVS Motor closed 1.66% down at Rs 611.05 on BSE.
According to Radhakrishnan, some tapering in volume was witnessed recently due to the introduction of e-way bill.
(With inputs from PTI)
