Shares of TVS Motor Company Ltd recovered from early losses and rose as much as 3% on Wednesday, January 28, after the company reported stronger-than-expected quarterly results, even after factoring in a one-time hit from the implementation of new labour codes.
The market reacted positively as TVS Motor delivered solid revenue growth, healthy margin expansion and a sharp rise in operating profit, signalling sustained demand momentum across its product portfolio.
Revenue and volume growth drive performance
TVS Motor reported revenue of ₹12,476.3 crore for the quarter, marking a 37% increase compared to the same period last year. The number came in above market expectations, which had pegged quarterly revenue at around ₹12,323 crore.
The strong top-line performance was largely driven by higher vehicle volumes. Total volumes grew 27% year-on-year and were up 2% on a sequential basis, indicating stable demand conditions even after a strong previous quarter.
Industry analysts said the volume-led growth reflects continued traction in both domestic and export markets, supported by a broader product mix and improving consumer sentiment.
Operating profit beats estimates
Earnings before interest, tax, depreciation and amortisation (EBITDA) rose sharply by 51.1% year-on-year to ₹1,634.2 crore. This was also higher than street estimates of about ₹1,569 crore.
Operating margins improved meaningfully during the quarter. EBITDA margin expanded to 13.1%, compared with 11.9% in the year-ago period. Margins were also around 40 basis points higher than analyst expectations, which had projected margins of 12.7%.
The margin expansion was supported by operating leverage from higher volumes, better cost control and improved product mix, according to market participants tracking the auto sector.
Net profit impacted by one-time labour cost
TVS Motor reported a net profit of ₹940.4 crore for the quarter. The profit figure includes a one-time impact of ₹41.4 crore related to the implementation of new labour codes.
Adjusted for this one-off cost, net profit would have been broadly in line with market expectations of around ₹982 crore. Analysts said the labour code impact appears to be a one-time adjustment and does not materially change the company’s underlying earnings trend.
Management commentary indicated that the company has already absorbed most of the transition-related costs, reducing the risk of similar hits in coming quarters.
Market reaction and stock performance
Following the earnings announcement, shares of TVS Motor were trading about 2.7% higher at ₹3,664.2 in afternoon trade. The stock had earlier dipped after the opening bell before reversing course as investors digested the earnings numbers.
Over the past 12 months, TVS Motor shares have gained around 57%, significantly outperforming broader market indices and many peers in the two-wheeler space.
Why the results matter
The latest quarterly performance reinforces TVS Motor’s position as one of the stronger performers in India’s two-wheeler segment. Despite cost pressures and regulatory changes, the company has managed to deliver robust growth and margin expansion.
Analysts say the focus will now shift to management’s outlook on demand trends, export markets and cost management, especially as the industry enters a seasonally stronger phase. Any guidance on future margin sustainability and volume growth will remain key triggers for the stock in the near term.