The company has a strategic partnership with BMW Motorrad to develop and manufacture sub-500cc bikes both for domestic and global
markets.
The favorable reservoir levels, good rabi output and possibility of normal monsoon may support agriculture growth. It is to be noted that much of the sale of two wheelers are in semi urban and rural areas which could see some benefit of this.
Global two-wheeler (2W) exports are largely dominated by China; India is the fourth largest exporter of 2Ws in the world. As automotive supply chains have started to move away from China and countries have started to impose trade restrictions on China, India and Thailand are emerging as alternative low-cost suppliers of 2Ws to the world. This is an opportunity for major 2W OEMs in India, according to analysts at JM Financial Institutional Securities.
The brokerage firm expects TVS Motor's margins to improve going ahead supported by improving profitability. Return ratios have been declining over the past two years (RoE from 25 per cent in FY18 to 17% in FY20) driven by a) BS6-related depreciation of assets and b) higher interest expenses. However, we expect the return ratios to bounce back to original levels as operating performance improves and depreciation related to major regulatory transitions is behind us, it said.
At 01:31 pm,
TVS Motor was trading 3 per cent higher at Rs 485 on the BSE, as compared to 1.4 per cent rise in the S&P BSE Sensex. The trading volumes on the counter more-than-doubled with a combined 3.9 million equity shares changing hands on the NSE and BSE.