TVS Motor Company Q4 Profits Slump 44.80 Per Cent; Annual Profits Down By 11.6 Per Cent

TVS Motor Company recorded a decline of 10.70 per cent in revenue from sales at Rs. 16,455 crore in FY2020 as compared to Rs. 18,217 crore in the previous financial year. The company's profit for the year also went down by 11.6 per cent at Rs. 592.25 crore as compared to 670.14 crore recorded a year ago. However, through sustainable cost reduction it has improved the operating EBITDA margins from 7.9 per cent to 8.3 per cent before accounting for one-time costs. These one-time costs are Rs. 22 crore for dealer discounts to transition to BS6 and Rs. 32 crore for COVID-19 relief work.The company's total sales in the same year went down by 16.61 per cent at 32,63,302 units as compared 39,19,702 units sold a year ago.

Also Read: BS6 TVS Apache RTR 160 4V, RTR 200 4V Prices Hiked By Up To ₹ 2,500

In the last quarter,Q4 of FY2020, TVS recorded a decline of 20.08 per cent in total revenue at Rs. 3,506.6 crore as compared to Rs. 4387.6 crore it recorded in the same period last year. It's profit in Q4 went down by 44.80 per cent at Rs. 73.87 crore as compared to Rs. 133.83 crore in the same quarter last year. Operating EBITDA for the quarter ended March 2020 prior to one-time additional dealer discount of Rs. 22 Crore and exceptional item of Rs. 32 Crore towards COVID-19 stood at at 7.6 per cent against 7 per cent reported in corresponding quarter of previous year. The company's total sales in the same quarter went down by 30.24 per cent at 6,32,920 units as compared to 9,07,306 units sold in Q4 of FY2020.

Also Read: TVS Motor Company Announces Salary Cuts For Employees

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The BS6 related discounts of Rs. 22 Crore have been reduced from operating revenue.

TVS Motor Company started the transition from BS4 to BS6 in Q3 of financial year 2019-20 and the Company, including its dealers almost entirely retailed all BS4 vehicles before March 31, 2020. The related discounts of Rs. 22 crore have been reduced from operating revenue. Even the current financial year hasn't been rewarding for the Indian auto industry seeing zero sales in the first months itself as operations across India were closed due to the coronavirus crisis in the country. Since March 23, 2020 the TVS manufacturing facilities have been closed in adherence to the lockdown guidelines issued by the Government of India which caused interruption to production and sales during this period. It's also one of the first two-wheeler brands in India to announce salary cuts for employees starting from the month of May 2020 till October 2020.



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