# Bajaj Auto vs TVS Motor Co: A Strategic Deep Dive into India's Two-Wheeler Giants

> This investment thesis provides a comprehensive comparative analysis of Bajaj Auto and TVS Motor Co, the leading forces in the Indian automotive sector. By evaluating their management structures, risk profiles, business models, and future growth trajectories, this research identifies which manufacturer is better positioned to lead the transition toward electric mobility and premiumization. Investors will gain critical insights into the operational efficiencies and market strategies driving these two-wheeler powerhouses.

**Companies**: Bajaj Auto, TVS Motor Co.
**Sectors**: Automotive
**Published**: 2026-04-14
**Last Updated**: 2026-04-15
**Source**: https://thesisloop.ai/thesis/19e5ec48-45ea-4c9b-a85d-257f37f57ea9

## Score Overview

| Company | Management | Business Model | Future Growth | Risk |
|---------|-----------|---------------|--------------|------|
| Bajaj Auto | 80/100 | 80/100 | 67/100 | 60/100 |
| TVS Motor Co. | 79/100 | 80/100 | 63/100 | 46/100 |

## Bajaj Auto (BSE:532977)

**Sector**: Automotive | **Industry**: 2/3 Wheelers

### Management Credibility

- **[METRIC] EBITDA per vehicle across ICE and EV segments** (POSITIVE, EXCEEDED): With the transition to the new platform, management confirmed that a couple of models in the Chetak portfolio have already moved to being EBITDA positive. (2 met, 1 exceeded across 3 tracked commitments)
  > I'd say we are now very close to line of sight on being EBITDA breakeven, yes.
- **[METRIC] Export revenue as percentage of total sales** (POSITIVE, MET): Export volumes grew by 24% in Q2 FY26, surpassing the guided range of 15-20%. (1 exceeded, 1 met across 2 tracked commitments)
  > we expect overall exports to continue to grow at 15% to 20% every quarter year on year.
- **[METRIC] Monthly and annual market share by OEM** (POSITIVE, MET): Management confirmed they exited the quarter in December back in the number 1 position in the segment. (1 met across 1 tracked commitment)
  > our aim is to come as close as possible to the number 1 position in FY '26.
- **[PRINCIPLE] Distribution network as competitive moat** (NEUTRAL): The company plans to expand the joint KTM-Triumph showroom network to over 100 outlets by March. — target: Over 100 showrooms
  > We currently have about 50 KT showrooms operational and plan to expand these to over 100 by March.
- **[PRINCIPLE] EV transition readiness and portfolio balance** (NEUTRAL): Complete derisking of the EV supply chain (HRE magnets) within six to nine months. — target: Complete derisking
  > complete derisking should take about six to nine months.
- **[PRINCIPLE] Export market diversification reduces domestic cyclicality** (POSITIVE, MET): Exports to KTM resumed in May 2025 after being suspended in Q4 due to receivable risks associated with the restructuring process. (1 met, 1 in progress across 2 tracked commitments)
  > We are on track to expand capacity to 50,000 units per annum this year.
- **[PRINCIPLE] Rural-urban demand mix drives product strategy** (POSITIVE, REVISED): Management maintains the 5% to 6% growth outlook for the domestic industry despite a flattish performance in Q1, citing seasonal factors and monsoon advancement as temporary dampeners. (1 in progress, 1 revised across 2 tracked commitments)
  > We expect this growth momentum in the industry to continue and the motorcycle industry to continue to grow at, say, 12% to 15%.
- **[PRINCIPLE] Three-wheeler segment as EV adoption leader** (POSITIVE, MET): The launch has been slightly delayed from early July to the middle of August 2025 as the product has now completed extended testing. (1 revised, 1 met across 2 tracked commitments)
  > Our product has now completed extended testing and will be launched in a few key markets by middle of August itself.
- **[TREND] Premiumisation toward 125cc+ and performance segments** (NEUTRAL): Bajaj plans to launch 8 more product interventions in the Pulsar 150cc plus segment over the next 4 months to acquire market share. — target: 8 interventions (+1 more commitment)
  > The waves of these interventions will be unrelenting here onwards with over 8 more such interventions being made in the next 4 months.
- **[TREND] Phased reduction of EV subsidies under PM e-Drive** (NEUTRAL): The company is working on building organic margins for electric three-wheelers to replace PLI benefits by March 2028. — target: organic margin replacement
  > hopefully, by the time PLI gets phased out in March of 2028, the benefits of that work stream will start to play out... to build margin on the back of very strong cost rationalization programs.
- **[TREND] TVS and Bajaj emerging as EV market leaders** (POSITIVE, EXCEEDED): The company successfully expanded the Chetak 35 series during the quarter, which includes the affordable variant that completes the transition to the new platform. (1 met, 1 exceeded across 2 tracked commitments)
  > as well as the impending introduction of a new variant in June as an upgrade to the entry level and large selling 2903
- The company has secured almost all regulatory approvals and has served notices to exercise call options to move to 100% shareholding in Pierer Bajaj, which holds 75% in Pierer Mobility. (3 met, 1 in progress across 4 tracked commitments) (POSITIVE, MET)
  > Maybe the last couple of Rs. 100 crores, between Rs. 200-Rs. 300 crores is what it will need from here onwards to get to a path of being able to sustain its own future growth.

### Business Model

- **[METRIC] EBITDA per vehicle across ICE and EV segments** (POSITIVE, Change: EXPANDING): The EV portfolio (Chetak and E-autos) has reached a double-digit EBITDA margin for the first time, despite supply chain constraints causing a 50% shortfall in planned volumes for Chetak. (1 expanding)
  > But what I do want to use the opportunity to call out is the fact that on the electric portfolio... in this quarter, we have hit a double-digit margin, EBITDA margin.
- **[METRIC] Electric vehicle penetration rate by segment** (POSITIVE, Change: EXPANDING): The EV portfolio has expanded significantly, now contributing nearly 20% of domestic revenue compared to under 10% in the previous year. (3 expanding)
  > the electric vehicle portfolio has moved from being under 10% of our domestic revenue to nearly 20% on a full year basis in the course of this current year.
- **[METRIC] Export revenue as percentage of total sales** (POSITIVE, Change: EXPANDING): Exports are recovering with 20% volume growth in Q4, led by Latin America which now accounts for over 30% of total export volume. (3 expanding)
  > Export revenues were about USD 600 million... Volumes crossed the 600,000 units a quarter mark.
- **[PRINCIPLE] Distribution network as competitive moat** (POSITIVE, Change: EXPANDING): The distribution moat for the Chetak brand is expanding, now reaching over 3,000 points of sale to support its market leadership. (4 expanding)
  > The scale-up was also supported by distribution network that expanded to nearly 450 exclusive Chetak stores and 4,000 points of sale across 800 cities and towns.
- **[PRINCIPLE] EV transition readiness and portfolio balance** (NEUTRAL): The Electric Vehicle (EV) portfolio, including 2-wheelers and 3-wheelers, has become a major revenue driver, now contributing a quarter of all domestic sales. — Electric Vehicle Portfolio (25% revenue share)
  > At an aggregate level, our EV portfolio comprising both electric 2-wheelers and 3-wheelers now contributes to a staggering 25% of domestic revenues... individually, both the segments, the Scooter segment and the Auto segment crossed INR1,000 crores of quarterly revenues each for the first time.
- **[PRINCIPLE] Export market diversification reduces domestic cyclicality** (POSITIVE, Change: EXPANDING): Exports reached an all-time high in revenue and volume, growing 24% YoY. Growth is diversifying away from Nigeria toward LATAM (Colombia/Mexico) and other emerging markets. (1 expanding)
  > The BU grew volumes by 24% in Q2 with exports of over 550,000 units. This delivered the highest ever quarterly revenue from exports.
- **[PRINCIPLE] Three-wheeler segment as EV adoption leader** (POSITIVE, Change: EXPANDING): Bajaj has strengthened its moat in the electric three-wheeler segment, doubling its market share from 17% to 33% within a year. (3 expanding)
  > We continue to maintain a 70% plus market share in the ICE segment with an overwhelming share of 85% plus in the CNG segment... exited the quarter in December back to the number 1 position in the [e-auto] segment.
- **[TREND] Premiumisation toward 125cc+ and performance segments** (POSITIVE, Change: EXPANDING): The ICE segment remains the core profit engine, with the 125cc+ motorcycle segment growing 12% and ICE three-wheelers maintaining a dominant 75% market share. (4 expanding)
  > FY '25 has again set new benchmarks with revenue hitting the peak of INR50,000 crores, for the first time... Industry growth was driven by the 125cc+ segment, which grew by 12%.
- Bajaj is strengthening its scale moat by acquiring 100% control of KTM (Pierer Bajaj AG), moving from an associate company to a fully consolidated subsidiary. (1 expanding across 1 engine) (POSITIVE, Change: EXPANDING)
  > revenue from operations crossed the INR15,000 crores milestone for the first time, coming in at INR15,220 crores for the quarter, representing a 19% year-on-year growth.

### Future Growth

- **[METRIC] Electric vehicle penetration rate by segment** (POSITIVE, Trend: ACCELERATING): The EV portfolio (Chetak and electric 3-wheelers) now contributes 14% of total revenue, showing significant acceleration from previous years where revenue was only INR 500 crores in FY23. (5 accelerating across 5 signals)
  > In this quarter, a sizable 14% of the domestic revenue has been contributed by the electric portfolio comprising both electric 3-wheeler and electric 2-wheelers.
- **[METRIC] Export revenue as percentage of total sales** (POSITIVE, Trend: ACCELERATING): Export volumes are showing a strong recovery, crossing the 500,000 unit mark for the quarter (approx. 167k/month) with a 27% volume growth in Q3, nearly double the estimated market growth. (3 accelerating, 2 steady across 5 signals)
  > The BU crossed the 200,000 average per month sales level in October '25 after nearly 40 months and maintained this level through the remainder of the quarter
- **[PRINCIPLE] Distribution network as competitive moat** (POSITIVE, Trend: ACCELERATING): Bajaj is rapidly expanding its physical footprint for EVs, planning to triple its store count from 200 to 600 within the first half of the new fiscal year. (5 accelerating across 5 signals, 1 leading indicator)
  > The scale-up was also supported by distribution network that expanded to nearly 450 exclusive Chetak stores and 4,000 points of sale across 800 cities and towns.
- **[PRINCIPLE] EV transition readiness and portfolio balance** (POSITIVE, Trend: STEADY): The EV portfolio (Chetak and 3W) is showing a steady upward trend in financial contribution, now hitting double-digit EBITDA margins despite recent supply chain constraints. (1 steady across 1 signal)
  > These collectively delivered almost 20% of domestic revenue but more importantly a double-digit EBITDA percentage in Q2.
- **[PRINCIPLE] Export market diversification reduces domestic cyclicality** (POSITIVE, Trend: ACCELERATING): Bajaj is moving from a minority investor to a controlling shareholder in KTM (Pierer Bajaj AG), aiming for a full turnaround and deeper synergy integration within 2-3 months. (2 new trend, 2 accelerating across 4 signals)
  > Effective November 18, Bajaj ownership in KTM Austria increased to 75% and a turnaround plan was commenced immediately... from the next quarter onwards, the KTM business will be fully consolidated
- **[PRINCIPLE] Three-wheeler segment as EV adoption leader** (NEUTRAL): The company dominates the high-growth CNG three-wheeler market with an 85% share, positioning it as the primary beneficiary of the shift toward cleaner commercial fuels. (+1 more signal)
  > We continue to maintain a 70% plus market share in the ICE segment with an overwhelming share of 85% plus in the CNG segment
- **[TREND] Battery-as-a-Service and innovative financing models** (POSITIVE, Trend: ACCELERATING): BACL is expanding its geographic coverage rapidly, currently covering 50% of Bajaj markets with a target to reach 100% by March 2025. (5 accelerating across 5 signals)
  > About 50% of the Bajaj Auto markets and stores have now been covered by BACL. We are on track to reach 100% by March '25.
- **[TREND] Premiumisation toward 125cc+ and performance segments** (NEUTRAL): The company is launching a massive product offensive for its Pulsar brand, with 15 total upgrades or new models being introduced over a 6-month period to regain leadership in the premium 150cc+ segment.
  > Seven interventions between November and now in the form of upgrades and refreshes have been made in the last 2 months... with over 8 more such interventions being made in the next 4 months.
- **[TREND] TVS and Bajaj emerging as EV market leaders** (POSITIVE, Trend: ACCELERATING): The EV segment (Chetak) is accelerating significantly, with market share rising from 5% to 13% within a year and quarterly volumes reaching 40,000 units, surpassing the total sales of the entire previous fiscal year. (2 accelerating across 2 signals)
  > At an aggregate level, our EV portfolio comprising both electric 2-wheelers and 3-wheelers now contributes to a staggering 25% of domestic revenues... the EV business now delivers double-digit EBITDA margin
- The transition to full control of KTM (via Bajaj Mobility AG) is in the final regulatory stages, representing a new trend of line-level consolidation and operational turnaround for the European business. (2 new trend across 2 signals) (POSITIVE, Trend: NEW_TREND)
  > Retail Finance, our 100% subsidiary, BACL, had an excellent quarter... has an AUM of over INR16,000 crores, and it has built a business driven by the twin pillars of digital first and robust operational management.

### Risk Assessment

- **[METRIC] EBITDA per vehicle across ICE and EV segments** (POSITIVE, Risk: MODERATE): The risk is easing as the Chetak business has moved from significant losses to a 'line of sight' on EBITDA breakeven, aided by the new 35 series platform and PLI incentives. (4 easing)
  > this rapid acceleration temporarily diluted profit mix given that electric 2-wheelers currently operate at lower margins compared to about 20% for the enterprise, this margin drag effect was well absorbed
- **[METRIC] Export revenue as percentage of total sales** (NEGATIVE, Risk: HIGH): The risk has intensified as KTM AG faced near insolvency due to high debt and inventory issues. Bajaj is now moving to take controlling interest (acquiring a stake in PBAG) to execute a comprehensive turnaround plan. (1 intensifying, 1 high-severity)
  > Nigeria, our largest market, doubled sales in Q3 compared to Q2, though it continued to be negative compared to previous year Q3. Significantly, Nigeria's weight in our portfolio is now half of what it was last year
- **[METRIC] Monthly and annual market share by OEM** (POSITIVE, Risk: MODERATE): Market share erosion in the 125cc+ segment (which includes Pulsar) is being actively countered. Share dropped from 26% in FY24 to 24% in FY25, but management reports marginal recovery starting April. (2 stable, 2 easing)
  > Since quarter 4 of financial year '25, we have been quite challenged for market share even in the Pulsar heartland of 150cc plus segment. And this continued well into quarter 1 FY'26. The genesis of the weakness, I think, lay in the asymmetry of our new product and upgrade cycle compared to that of 
- **[PRINCIPLE] Export market diversification reduces domestic cyclicality** (POSITIVE, Risk: MODERATE): The risk is easing as the top 30 overseas markets showed a healthy 26% growth in Q4, signaling a recovery from previous volatility. (3 easing, 1 intensifying)
  > disruption in the emerging markets and dislocations is a way of life, right from banning, tariff, currency devaluation, shipping issues, etcetera.
- **[PRINCIPLE] Rural-urban demand mix drives product strategy** (NEGATIVE): Demand remains under pressure in larger towns due to rental inflation and reduced purchasing power, leading to a 2% decline in industry registrations in Q4. (2 stable, 1 intensifying)
  > The larger towns, that kind of a segment is slowing down, perhaps under the pressure of the inflation... driven particularly by things like rental inflation. And we have seen some pressure on purchasing power.
- **[PRINCIPLE] Three-wheeler segment as EV adoption leader** (POSITIVE): The risk is easing as the company has achieved leadership in the e-auto segment with over 35% market share and is seeing improved unit economics despite subsidy changes. (1 easing)
  > In the EV segment, we achieved the pole position in Q1 with an over 35% market share in the e-auto segment... This has lifted both the ASPs and profitability of the EV segment.
- **[TREND] Premiumisation toward 125cc+ and performance segments** (POSITIVE, Risk: MODERATE): The risk is easing as product and pricing interventions initiated in Q4 have led to a 3 percentage point sequential improvement in the 125cc plus segment market share. (1 easing, 2 stable)
  > the GST rates on motorcycles in excess of 350cc had moved up from the 31%, which was essentially 28% GST rate plus 3% cess to 40%. And what we chose to do was to really hold pricing to ensure that momentum wasn't lost. And therefore, what we did was to really absorb that into the margins
- **[TREND] Phased reduction of EV subsidies under PM e-Drive** (NEGATIVE, Risk: HIGH): The risk is easing as the company has achieved double-digit EBITDA margins in the EV portfolio (including 3-wheelers) despite subsidy changes, and is actively rationalizing costs to build organic margins. (1 easing, 1 intensifying, 1 high-severity)
  > firstly, the absorption of the withdrawal of the PM E-DRIVE incentives in the Electric 3-wheeler segment. While the withdrawal occurred towards the later part of the quarter, the impact was meaningful at approximately INR23,000 to INR25,000 per vehicle
- Commodity inflation is intensifying for the upcoming quarter (Q1 FY26) due to surging aluminum prices and the cost of new OBD IIb regulatory norms, expected to impact margins by nearly 1%. (3 intensifying, 2 easing) (NEGATIVE, Risk: MODERATE)
  > Noble Metals especially platinum, palladium and rhodium all saw sharp increases, whilst aluminium, copper, nickel and lead also continued to harden... we saw a net price versus cost inflation hit of nearly 50 basis points on the margin.

### Scenario Analysis

- The adoption of AI-driven automation in financing and R&D accelerates product launch cycles and lowers the cost of credit, directly boosting vehicle affordability and sales volume. This leads to a second-order transformation of the customer experience through digital-physical hybrid networks, allowing Bajaj to capture high-quality consumer data. Ultimately, this creates a third-order structural shift where Bajaj evolves from a hardware manufacturer into a software-integrated mobility leader, potentially consolidating the market as smaller players fail to fund the necessary AI infrastructure. (POSITIVE)
  > Also, the other is that if you've seen the cost structure, and you would have heard Rakesh talk about the digital-first approach and the mode that it has taken to build out its business. It's not a heavy feet-on-street business, right? So, it's not about manpower and large teams. There's a lot of di
- The Iran conflict triggers immediate maritime dislocations in the Red Sea and Strait of Hormuz, directly threatening Bajaj's 200,000-unit monthly export target to Africa and Latin America. These shipping disruptions lead to second-order trade route realignment costs and marine insurance spikes, while simultaneously driving up the 'metals complex' (platinum, palladium) essential for catalytic converters. Ultimately, this forces a third-order structural shift where Bajaj must choose between sacrificing margins to maintain market share or raising prices and further dampening domestic demand already pressured by high fuel costs. (NEGATIVE)
  > On the commodity front, as I have mentioned in the last earnings call, we had begun to see some cost pressures across the metals complex during the quarter. Noble Metals especially platinum, palladium and rhodium all saw sharp increases, whilst aluminium, copper, nickel and lead also continued to ha

## TVS Motor Co. (BSE:532343)

**Sector**: Automotive | **Industry**: 2/3 Wheelers

### Management Credibility

- **[CATALYST] PLI scheme for ACC battery and auto components** (POSITIVE, EXCEEDED): The PLI benefit for the quarter came in at 0.7%, slightly exceeding the previous guidance range of 0.5% to 0.6%. (1 exceeded, 3 met, 1 in progress across 5 tracked commitments)
  > K. N. Radhakrishnan: Same. Same, 0.5%. Can be 0.6%. It will be around that. ... Yes of the EV revenues. Sorry, of the total revenue.
- **[METRIC] EBITDA per vehicle across ICE and EV segments** (POSITIVE, MET): The company successfully offset a 0.6% commodity cost increase in Q2 through similar price increases and cost reduction efforts, leading to a 100 bps improvement in EBITDA margins. (1 met across 1 tracked commitment)
  > I'm pretty confident that while the volumes are growing, I'm very confident that this EV will also become EBITDA positive, and it will also grow forward the overall PBT level.
- **[METRIC] Electric vehicle penetration rate by segment** (NEUTRAL): Management expects EV penetration in the 2-wheeler and 3-wheeler segments to continue increasing from the current 32%. — target: >32%
  > I think you will see EV penetration going up in 2-wheeler and 3-wheeler anyway, it has almost come to now 32% in this quarter. So that will go up.
- **[METRIC] Export revenue as percentage of total sales** (POSITIVE, EXCEEDED): International sales grew by 31% in Q2, outperforming the industry growth of 26%, and achieved a milestone of 4 lakh units in quarterly sales. (1 exceeded across 1 tracked commitment)
  > On International business, during Q2, TVSM posted highest ever quarterly sales of crossing milestone of 4 lakh units, 400,000, driven by strong growth in major markets. ... Africa is growing, the demand is growing.
- **[METRIC] Monthly and annual market share by OEM** (POSITIVE, EXCEEDED): The company achieved record quarterly sales and revenue in Q1 FY26, with overall sales growing by 17% and revenue by 20%, indicating momentum is exceeding previous year levels. (3 exceeded across 3 tracked commitments)
  > That's the reason I said Q3 and Q4, if I look at the 2-wheeler industry is likely to grow around 8%
- **[PRINCIPLE] Distribution network as competitive moat** (NEUTRAL): TVS Orbiter EV 2-wheeler will be available across India by the start of Q4 FY26. — target: All India availability (+1 more commitment)
  > I'm very sure the newly launched TVS Orbiter will further provide impetus to TVS EV 2-wheeler business and very confident that it will be available all India by start of Q4.
- **[PRINCIPLE] EV transition readiness and portfolio balance** (POSITIVE, IN_PROGRESS): Management has launched the TVS iQube in Indonesia during Q1, showing progress on EV expansion, though specific new domestic models for Q1 were not detailed beyond existing variants. (2 in progress, 1 exceeded across 3 tracked commitments)
  > Magnet availability continue to pose challenges in the short to medium term.
- **[PRINCIPLE] Export market diversification reduces domestic cyclicality** (POSITIVE, EXCEEDED): International sales grew by 40% in Q1 FY26, significantly outperforming the industry growth of 23%. Management noted that the bottoming out in Africa is over. (2 exceeded across 2 tracked commitments)
  > On the international side we expect healthy growth, primarily because Africa, which was very low last year, it has reached really the bottom, so you will see upward improvements this year.
- **[PRINCIPLE] Rural-urban demand mix drives product strategy** (NEUTRAL, IN_PROGRESS): In Q1 FY26, domestic ICE sales grew by 8%, which management characterized as moderate growth. They expect this moderate growth to continue into Q2 (July-September). (1 in progress across 1 tracked commitment)
  > Overall growth momentum in the domestic market, we are expecting is likely to be like last year.
- **[PRINCIPLE] Three-wheeler segment as EV adoption leader** (POSITIVE, MET): Three-wheeler sales grew significantly by 46% in Q1 FY26, supporting the company's push into this segment. (1 exceeded, 2 in progress, 2 met across 5 tracked commitments)
  > Raghunandhan: Just trying to understand, would this mean that we have started accruing PLI for 3-wheelers? Or would it start from next quarter? K. N. Radhakrishnan: Next quarter.
- **[TREND] Connected and smart features becoming standard** (NEUTRAL): Launch of TVS Orbiter to strengthen the EV segment in urban mobility.
  > EV Segment is further strengthened with the launch of TVS Orbiter, a smart, stylish EV that redefines everyday urban mobility with effortless range and connectivity.
- **[TREND] Premiumisation toward 125cc+ and performance segments** (NEUTRAL, REVISED): The timeline for Norton products hitting the market has been clarified to calendar year 2026, which aligns with the end of FY26/start of FY27. (1 revised across 1 tracked commitment)
  > And these products are going to hit the market in 2026 this year. You will see the growth coming, and they are super premium, and it is going to definitely delight the customers globally.
- **[TREND] TVS and Bajaj emerging as EV market leaders** (NEUTRAL): TVS aims to cross monthly sales of 10,000 units for the newly launched Orbiter EV. — target: 10,000 units per month (+1 more commitment)
  > The demand is excellent, and we are ramping up now. First, we'll cross that 10,000 numbers per month, okay?
- Management confirmed the investment number remains similar to previous guidance, specifically mentioning a range of INR 1,600 to INR 2,000 crores for the year. (1 in progress, 1 revised, 1 met across 3 tracked commitments) (POSITIVE, REVISED)
  > Binay: Right, sir. Sir, just lastly, the investment number that we talked about last time, shall we -- is it the same INR2,000 crores investment this year... K. N. Radhakrishnan: It will be similar. Will be similar.

### Business Model

- **[CATALYST] PLI scheme for ACC battery and auto components** (POSITIVE, Change: EXPANDING): The company's competitive advantage in technology is being reinforced by the recognition of Production Linked Incentive (PLI) benefits, which are awarded for meeting specific government standards for advanced automotive technology and localization. (1 expanding)
  > During the quarter, the company recognized Production Linked Incentive (PLI) pertaining to the full financial year 2024-25 based on the progress made in line with the MHI's SOP on PLI.
- **[METRIC] EBITDA per vehicle across ICE and EV segments** (POSITIVE, Change: EXPANDING): The company's overall profitability per unit is improving, with EBITDA margins expanding by 120 basis points (1.2%) over the previous year, driven by better product mix and operational efficiencies. (3 expanding)
  > Operating EBITDA grew by 27% at Rs. 4,454 Crores with a margin improvement of 120bps at 12.3% as against 11.1% during last year
- **[METRIC] Electric vehicle penetration rate by segment** (POSITIVE, Change: EXPANDING): EV sales volumes grew 35% to 70,000 units, with the segment now generating approximately INR 1,000 crores in quarterly revenue. (3 expanding across 1 engine)
  > EV 2-wheeler sales grew by 40%, and it has crossed 1 lakh this year, 1,06,000 units as against 76,000 units during Q3 of last year.
- **[METRIC] Export revenue as percentage of total sales** (POSITIVE, Change: EXPANDING): International sales saw a massive rebound, growing 40% YoY, driven by stabilization in Africa and growth in LATAM and Asia. (4 expanding)
  > IB overall revenue for this quarter is about INR2,909 crores
- **[PRINCIPLE] EV transition readiness and portfolio balance** (POSITIVE, Change: EXPANDING): The core ICE segment continues to expand, outperforming industry growth rates. Domestic ICE two-wheeler sales grew by 9% compared to an industry growth of 7%, while international ICE sales surged by 23%. (4 expanding)
  > Now, coming to sales, the two-wheeler domestic ICE sales grew by 9% over the last year as against industry growth of 7%. The two-wheeler international market, the Company sales grew by 23% against the industry growth of about 21%. Total ICE two-wheeler grew by 12% compared to the last year as agains
- **[PRINCIPLE] Export market diversification reduces domestic cyclicality** (POSITIVE, Change: EXPANDING): TVS continues to expand its global footprint, specifically entering new markets like Morocco and reaching significant sales milestones for export-specific models like the TVS HLX. (3 expanding)
  > TVS Motor Company enters Morocco: Expanding Horizons in Africa... TVS HLX reached 4 Million global sales milestone
- **[TREND] Connected and smart features becoming standard** (POSITIVE, Change: EXPANDING): The company's moat is strengthening through heavy R&D investment in software, digital, and analytics. This has led to a decade-long improvement in EBITDA margins from 6% to 12.3%. (2 expanding)
  > During 2014-15 Company's EBITDA was at 6% and now this year we are closing with 12.3%. We are confident that the Company will continue to leverage its top line growth, better product mix, sustained cost reduction initiatives, and improve profitability going forward.
- **[TREND] Premiumisation toward 125cc+ and performance segments** (POSITIVE, Change: EXPANDING): The core ICE (Internal Combustion Engine) business remains the primary revenue driver, with motorcycle sales growing 10% and scooter sales (including EVs) growing 21% for the full year. However, three-wheeler volumes saw a slight contraction of 7.5% for the full year. (5 expanding)
  > During the year ended March 2025, the overall two and and three-wheeler sales of TVS Motor Company, grew by 13% at 47.44 Lakh units as against 41.91 Lakh units in the year 2023-24.
- **[TREND] TVS and Bajaj emerging as EV market leaders** (POSITIVE, Change: EXPANDING): EV sales are expanding rapidly, significantly outperforming the overall growth rate of the company. EV volumes grew by 44% for the full year, reaching 2.79 lakh units, and now represent approximately 5.9% of total unit sales. (4 expanding)
  > See, the strength of TVS Motor is very strong R&D and new product development capability. We look at the customer very closely.
- TVS Credit is expanding its role as a strategic moat, with the book size growing to Rs. 26,647 crores and serving 1.9 crore customers. Profitability in this segment grew by 35% YoY. (4 expanding, 1 stable across 2 engines) (POSITIVE, Change: EXPANDING)
  > spare parts all put together about INR1,183 crores.

### Future Growth

- **[CATALYST] PLI scheme for ACC battery and auto components** (POSITIVE, Trend: NEW_TREND): The company has begun accruing PLI benefits across its product range, with the incentive amount increasing compared to the previous quarter. (1 accelerating, 4 new trend across 5 signals)
  > It has a little bit gone up. It is about 0.7%... It's a combination of the company and some of the suppliers getting the benefit overall.
- **[METRIC] Average selling price (ASP) trend and product mix** (NEUTRAL): Profitability is improving due to 'premiumization'—selling more expensive, high-feature models—and better cost management, leading to record-high margins. — Operating EBITDA margin: +120 basis points YoY
  > The company's operating EBITDA margin improved by 120 basis points at 13.1% as against 11.9% during Q3 of last year.
- **[METRIC] EBITDA per vehicle across ICE and EV segments** (POSITIVE, Trend: STEADY): Profitability margins are accelerating, reaching a record 14.0% in Q4, driven by operational efficiencies and government incentives. (1 accelerating, 2 steady across 3 signals)
  > Operating EBITDA for the year improved by 120 bps at 12.3% over the last year... The Company’s Operating EBITDA margin is at 14.0% in Q4.
- **[METRIC] Electric vehicle penetration rate by segment** (NEGATIVE, Trend: DECELERATING): Electric vehicle sales are accelerating. The growth rate for the most recent quarter (57%) is significantly higher than the nine-month average (40.9%), showing strong momentum in the shift toward battery-powered scooters. (2 accelerating, 1 steady, 1 decelerating across 4 signals)
  > I think you will see EV penetration going up in 2-wheeler and 3-wheeler anyway, it has almost come to now 32% in this quarter.
- **[PRINCIPLE] Export market diversification reduces domestic cyclicality** (NEUTRAL): The company is expanding its footprint in international markets like Mexico and Sri Lanka, leveraging popular models like the Jupiter scooter.
  > So we see, first of all, we are now building Mexico, okay?... Sri Lanka coming back in a big category is a big, big advantage because Sri Lanka is a big scooter market.
- **[PRINCIPLE] Rural-urban demand mix drives product strategy** (POSITIVE, Trend: STEADY): TVS Credit is seeing steady expansion in its book size and customer reach, adding 41 lakh new customers in the first 9 months of the fiscal year. (1 steady across 1 signal)
  > The book size is INR29,678 crores, grew by 9% over last year Q3. TVS Credit PBT before exceptional items for the quarter grew by 21%.
- **[PRINCIPLE] Three-wheeler segment as EV adoption leader** (POSITIVE, Trend: ACCELERATING): Three-wheeler sales are showing strong recovery and acceleration in the fourth quarter, growing 21% compared to a full-year decline of 7%. The electric three-wheeler segment is a major driver, with penetration reaching 26% in Q4. (5 accelerating across 5 signals)
  > Total sales of 3-wheeler is more than doubled to 60,000 units as against 29,000 units during last year third quarter.
- **[TREND] Premiumisation toward 125cc+ and performance segments** (POSITIVE, Trend: ACCELERATING): Profitability margins are showing steady improvement. The company achieved its highest-ever operating margin of 11.9% this quarter, maintaining a consistent 70 basis point improvement over both the quarterly and nine-month comparative periods. (2 steady, 3 accelerating across 5 signals, 1 leading indicator)
  > The new Manx and Atlas families position the TVS ecosystem firmly in the premium, in the high-emotion luxury motorcycle segment... these products are going to hit the market in 2026 this year.
- **[TREND] TVS and Bajaj emerging as EV market leaders** (POSITIVE, Trend: ACCELERATING): EV two-wheeler sales are accelerating significantly, with Q4 growth (54%) outpacing the full-year growth rate (44%). The company is expanding its iQube lineup and network to sustain this momentum. (2 accelerating, 2 steady across 4 signals)
  > EV 2-wheeler sales grew by 40%, and it has crossed 1 lakh this year, 1,06,000 units as against 76,000 units during Q3 of last year.
- TVS Credit is showing accelerating profitability and customer acquisition. The financing arm added 40 lakh new customers in the current year, with profit before tax (PBT) growing 53% in the final quarter. (2 accelerating, 2 steady across 4 signals, 1 leading indicator) (POSITIVE, Trend: STEADY)
  > And for taking capacity increases, it takes about 2 months to 3 months. And fortunately, we have been very proactive in investing behind that.

### Risk Assessment

- **[CATALYST] PLI scheme for ACC battery and auto components** (NEUTRAL, Risk: MODERATE): The company's electric vehicle profitability is currently dependent on government subsidies (PLI scheme), and any change in eligibility or pricing could impact margins. [REGULATORY]
  > Just a related question was on like PLI... It has a little bit gone up. It is about 0.7%.
- **[METRIC] EBITDA per vehicle across ICE and EV segments** (POSITIVE): EASING. Operating EBITDA margins improved significantly to 12.3% for the full year (up 120 bps) and reached 14.0% in Q4 (12.5% excluding one-time PLI benefits), suggesting the company has successfully managed cost pressures through pricing or efficiency. (5 easing)
  > Operating EBITDA for the year improved by 120 bps at 12.3% over the last year... The Company’s Operating EBITDA margin is at 14.0% in Q4. Excluding the PLI benefit of previous quarters, Q4 EBITDA margin would be at 12.5% as against 11.3% during Q4 of last year.
- **[METRIC] Export revenue as percentage of total sales** (POSITIVE, Risk: LOW): The risk is intensifying; management noted that European markets are going through 'very, very tough times,' impacting the e-cycle business (SEMG). (1 intensifying, 1 stable, 2 easing)
  > while there are some impact on the duty, we are also looking at localization. So we are not seeing a serious impact at this point of time because the volumes are low
- **[PRINCIPLE] EV transition readiness and portfolio balance** (NEGATIVE, Risk: MODERATE): STABLE: The company continues to face short-term setbacks in magnet availability, managing production on a daily basis while seeking long-term alternatives. (1 stable, 2 intensifying, 1 easing)
  > And all of you know that we had some challenges on the magnets availability.
- **[PRINCIPLE] Export market diversification reduces domestic cyclicality** (NEUTRAL, Risk: LOW): STABLE: Management admits the e-bike business in Europe is 'a bit slow' due to the economy, requiring patience for a medium-term breakeven. (2 stable)
  > Europe continued to have challenges. It is not growing.
- **[PRINCIPLE] Rural-urban demand mix drives product strategy** (POSITIVE, Risk: MODERATE): EASING: Rural growth (3.3%) was slightly lower than urban (4%) in Q1, but early monsoons and high reservoir levels (70% above 10-year average) signal a recovery. (2 easing)
  > I think what is happening is the entry-level segment is not growing as much.
- **[TREND] Premiumisation toward 125cc+ and performance segments** (NEUTRAL): STABLE. While overall motorcycle sales grew 10%, they were outperformed by scooters (up 21% for the year and 27% in Q4), indicating that the demand shift toward scooters and premium segments continues. (3 stable, 1 intensifying, 1 easing)
  > Motorcycle sales for the quarter ended March 2025 grew by 10%... Scooter sales for the quarter ended March 2025 grew by 27%.
- **[TREND] Phased reduction of EV subsidies under PM e-Drive** (POSITIVE): EASING: While still a factor, management reports being gross margin positive on both 2W and 3W EVs even as they work through PLI eligibility for the full portfolio. (1 easing, 4 stable)
  > I already said we are positive on gross margin. In any business, when you start first is to make sure that the gross margin is positive. That both in the two-wheeler and three-wheeler, we are positive.
- **[TREND] TVS and Bajaj emerging as EV market leaders** (POSITIVE): EASING. EV sales grew by 44% for the full year and 54% in Q4, reaching 2.79 lakh units annually. This high growth rate suggests that previous supply chain bottlenecks for critical components have been largely resolved. (2 easing)
  > Electric vehicles grew by 44% registering sales of 2.79 Lakh units in the year 2024-25 as against 1.94 Lakh units during 2023-24.
- INTENSIFYING: Management expects a 0.5% increase in the commodity basket for Q2, specifically driven by steel prices and safeguard duties. (2 intensifying, 3 stable) (NEGATIVE, Risk: MODERATE)
  > I think there are increases in aluminum, copper, zinc, platinum, palladium, rhodium... impact, maybe about 0.2%, 0.3%.

### Scenario Analysis

- No significant impacts identified (NEUTRAL)
- The causal chain begins with heavy R&D spending on AI-powered product launches and digital NPI programs, which accelerates time-to-market for high-margin EVs and premium bikes. These tech-heavy products create a data-led moat and a 'connected ecosystem' (second-order), allowing TVS to capture higher customer lifetime value through smart services. Ultimately, this shifts the business model from selling hardware to providing a data-driven mobility experience, positioning TVS as a leader in the industry's digital consolidation (third-order). (POSITIVE)
  > And new technologies, R&D, we always -- we put our investments, And this quarter, we have the maintenance, the annual maintenance. So we spent about INR15 crores, which is as per plan.

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