Export sop repeal hits TVS Motor net by 22%

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Even as TVS Motor Company posted 33.5 per cent growth in its turnover in the second quarter of 2006-07, its net profit for the quarter dropped 22.28 per cent owing to the withdrawal of an export subsidy (DEPB Target Plus Incentive) by the Union government in Budget 2006-07.

The company posted a net profit of Rs 24.83 crore as against a net profit of Rs 32.95 crore during the corresponding quarter in FY05. The previous period's net profit included Rs 9.7 crore of the export subsidy.

The net revenue of the company stood at Rs 1,088.75 crore as against Rs 815.36 crore posted during the corresponding quarter in the previous year.

"Even though the raw material cost increased during the quarter by almost 2 per cent, prompting a price rise, we were able to witness robust growth. This quarter also took our share in the motorcycle market from 12.6 per cent a year ago to 14.8 per cent," said K N Radhakrishnan, president, TVS Motor.

During the quarter, the motorcycle sales showed a growth of 37.3 per cent to 2,58,321 units compared with 1,88,200 recorded during the corresponding quarter last year.

The company witnessed growth in all segments, including motorcycles, scooters and mopeds. The market share of the company in the two-wheeler market grew to 20.1 per cent during the quarter from 17.8 per cent a year ago.

Owing to the increase in the cost of raw materials, such as steel, aluminium and rubber by almost 2 per cent, the company has effected a marginal increase in prices by about 1 per cent in some of its models. In the next two quarters, the company is planning to launch two new variants of its newly launched Star and Apache models.

Besides, the company has recently announced the launching of Scooty TeenZ, a two-stroke model, which will be released in the market soon, Radhakrishnan said.

The exports during the quarter posted 38 per cent growth to 31,729 units against 22,954 units recorded during the corresponding quarter last year.