TVS Motor expects growth momentum to continue this fiscal

In its Annual Report for 2022-23, the company stated that it maintains a cautiously optimistic view regarding the current fiscal.

In spite of the difference in the specific forecast, the almost common agreement is that India’s GDP growth will remain the highest among all major economies, it stated.

Improving road infrastructure and the economic environment with mass transit systems will further drive the demand for mobility for the masses, TVS Motor said.

This demand is today best served by the two-wheeler segment, making its fundamentals very attractive considering a resurgent India, it added.

“Due to the above fundamentals and strong product lineup, unwavering focus on consumer, quality and cost, the company is confident going into FY 2023-24,” the company informed its shareholders. The two-wheeler industry wholesales stood at 15.5 million units last fiscal compared to 13.4 million units in FY22. Although the industry has grown last fiscal, it is still lower than the 16 million unit mark achieved in 2014-15 and a long way off from the industry high of 21.2 million in 2018-19.

Compared to the industry growth of 15.5 per cent, TVS recorded a 22.8 per cent growth in 2022-23 compared to FY22.

TVS said it is positive about the performance of the premium motorcycle and scooter segment with improved urban demand.

However, rural recovery continues to be slow, and it will significantly impact the growth trajectory of the economy, the company said.

“El Nino arriving early and affecting monsoon may lead to a weaker performance of the rural agricultural sector, impacting the already weakened rural demand,” it added.

The company further said that demand for moped and entry-level motorcycle segments has witnessed constrained demand due to weak performance in the rural non-agricultural sector.

“A poor monsoon could further adversely impact demand,” the company said. Two-wheeler exports, however, likely to see growth during the year after the weak performance in 2022-23, TVS Motor said.

The African market is expected to perform better in 2023-24, recovering from the global slowdown and with the moderation of inflation, it said.

Expansion programmes in LATAM, ASEAN and the Middle East will add further momentum, TVS Motor noted.

Falling freight rates and better availability of containers are likely to support exports from India this year, it added.