TVS Q2 net drops 52% to Rs 12cr

High raw materials cost saw TVS Motor Company post a 52% drop in net profit at Rs 11.92 crore for the quarter ended September 30, 2007 when compared with Rs 24.83 crore in the corresponding period of the last fiscal.

Net sales declined 24% to Rs 823.42 crore from Rs 1,077.89 crore in the same period last year.

The drop in sales was due to the slowdown in the motorcycle segment on account of stringent norms followed by retail financiers as well high interest rates.

An official statement said with the festival season this year delayed to October/November, placement of stocks with dealers for the festival season is likely in the third quarter. 

Though sales of motorcycles went down, the company reported higher growth in scooter sales, which went up from 73,364 units to 75,685 units during the quarter. 

The cost of raw materials during the quarter was 74.6% (74.3% in the first quarter of this fiscal) of revenue when compared with 73.2%  in the same period of the last fiscal. Value engineering and process improvements have partially neutralised the input cost increase, the statement added.