TVS Motor Company Limited (TVSMOTOR.BO) Earnings Call Transcript & Summary

Good afternoon to all. 83 number of shareholders are attending the meeting. Request Chairman to convene the meeting.

Good afternoon, dear shareholders, dear ladies and gentlemen, it gives me a great pleasure to welcome you all to the 33rd Annual General Meeting of your company. We are pleased that so many of you have come, and thank you. Thank you for your interest and trust in our company. We look forward to an exciting time with you today. I, Professor Ralf Dieter Speth, Chairman of the company, call the meeting to order. The requisite quorum is present. And to begin with, let me thank you for the confident support that the support extended to the company throughout the whole year. And now let's start the meeting with prayer. [Presentation]

Ladies and gentlemen, now I will present to you the planned schedule of today's AGM. Six agenda items are called. First, statutory requirements and the admin information for the meeting; second, the introduction of the Board of Directors; third, the Chairman's speak; fourth, 5 resolutions to be approved by the shareholders; fifth, queries from speaker shareholders and the management's response to a Q&A session and last but not least, the official conclusion. So let me start with the first agenda item, statutory requirements. In compliance with the circulars issued by the Ministry of Corporate Affairs and the Securities Exchange Board of India, this AGM is being convened through video conferencing and the company has engaged National Security Depository Limited, NSDL, for this purpose. The company being one of the top 100 listed companies is providing one-way live webcast of the proceedings of the AGM. Soft copy of register of directors and key managerial personnel and their shareholdings, register of contracts, register of members and [indiscernible] shareholders are accessible on the company's website during the continuance of the AGM. As per the guidelines, the company has sent its annual report to the shareholders through e-mail. Hard copies of the annual reports were sent to those shareholders who requested the same. Shareholders participating in the AGM who have not cast their votes earlier through e-voting can exercise their votes by using the link provided on the NSDL website. In addition, I want to inform you for the sake of completeness. Notice of the meeting has been circulated to all shareholders on time. And both the statutory auditor's report and the secretarial auditor's report to the shareholders are already available with you. And both reports are free from any qualifications and observations or other remarks. So a great performance of the team. Thank you. This brings me to the second point of today's agenda, the introduction of the Board. And I'm sure you have known the personalities for a very long time. And may I request the directors to introduce themselves. First, I want to start with Mr. Venu Srinivasan, the Chairman Emeritus, CE and Managing Director. Today, Mr. Venu Srinivasan is not present due to personal commitments. So I just wish to inform you that CE is also the Chairman of the Corporate Responsibility Committee. Mr. Sudarshan Venu, Managing Director, Sudarshan?

Good morning, good afternoon. I'm Sudarshan Venu, Managing Director.

Mr. K. N. R. Director and CEO.

Good morning. I'm K. N. Radhakrishnan, Director and CEO of the company.

Mr. Shailesh Haribhakti.

Good afternoon. I am Chairman of the Audit Committee of your company.

Dr. Deepali Pant Joshi, the Independent Director.

Good afternoon. I'm an Independent Director of the Group and Chairman of Stakeholder Relationship Committee.

Thank you. Mr. Vijay Sankar.

Good afternoon. This is Vijay Sankar. I'm an Independent Director of the company and also the Chairman of the Nomination and Remuneration Committee.

Thanks a lot. Mr. B. Sriram.

Good afternoon. I'm B. Sriram, Independent Director of the company, and I also chair the Risk Management Committee of the Board. Thank you.

So dear directors, many thanks for the brief introduction. And I just want to take the opportunity to thank you all for your passion, your engagement and your commitment throughout the year. And dear shareholders, I just have to express that you, the TVS Board has got an outstanding team. Thank you. Ladies and gentlemen, this leads me to the third item of today's agenda, the Chairman's speech. And dear shareholders, I'm really delighted to share the highlights of what has been a truly standout year for our company. TVS Motor. Fiscal '24-'25 was about very strong performances. We broke records. We expanded our footprint, and we led in exciting new categories. And this sets a benchmark for the current year, and I'm confident, absolutely confident that the seasoned team will outperform again. But let me walk through the numbers for fiscal 2025. Our overall sales reached 4.74 million units, a 30% increase over last year. Revenue surged to INR 36,309 crores, our highest revenue ever. And profit before tax rose by an impressive 31% to INR 3,629 crores, outstanding figures. TVS Credit. TVS Credit, our financial arm now serves over 19 million customers, enabling them to achieve their aspirations. And TVS Credit is expanding in the new markets, too. TVS Credit is a success story and many thanks to the passionate team. These figures above, I guess, demonstrate our commitment. They are also a testament to our vision to deliver mobility that is transformative, responsible, customer-focused, sustainable and future-facing and always customer, customer first. Let's talk about EVs and new products. Ladies and gentlemen, the assets of this company lies not only in engineering very desirable vehicles, but in earning the trust of our customers, partners and stakeholders. Quality, reliability, service and customer centricity, the core tenets of the future enterprise continue to be our key focus areas. This DNA introduced and lived by Venu Srinivasan, the CE has always been the TVS way, and we will continue on this path. Our belief that electric vehicles will become the chosen mode of [ commute ] and self-expression has resulted in outstanding gains. Years ago, we began investing in EVs, not just in engineering and R&D, but also in front-end capabilities in sales and service and in the dealerships. And we paid particular attention to the security requirements resulting from the new technology and provided comprehensive training. And so today, the TVS iQube is India's top-selling electric 2-wheeler. Our electric 2-wheeler sales soared by 45% in the last fiscal year. iQube is now also expanding in South Asia, and I can confirm you that it's just the beginning. We are observing similar results in the EV 3-wheeler space. Within the very first few months of entering this segment, we have achieved a 10% share in the EV 3-wheeler market. And our desirable ICE portfolio -- for the desirable ICE portfolio, the last fiscal year was another outstanding year. The portfolio grew by 12%, outpacing the industry. So for instance, we launched the TVS Jupiter 110, setting new benchmark in technology, sales and customer appreciation. Jupiter became the most awarded scooter of the year. And the TVS Apache RR 310, among the most loved motorcycles in its segment, also launched a new and refreshed and updated version, and it has quickly become a benchmark in sports motorcycles. Our team launched many more smart product interventions and innovations. Introducing all of them to you today would go beyond today's agenda. But you can find further details in the annual report and on the website. In essence, innovation drives our journey and precision and excellence fuels us. We are a mobility solutions company. So for us, this will always be a journey. And I can assure you the pipeline is well filled. Look forward to the new product portfolio of the future. Becoming global. Ladies and gentlemen, as you know, TVS has come a long way. Less than a decade ago, we were a formidable domestic manufacturer. And today, we are bonafide global mobility powerhouse, positioned at the forefront of innovation in both internal combustion engines and electric mobility. We are present in 90-plus countries and more than 63 million users ride our vehicles. Our 2-wheeler exports in fiscal '25 rose by 22.8%, reaching [ 1.09 million ] units with a very strong demand in Africa and Latin America, driving this momentum. And we entered Europe. With the launch of operations in Italy. The love and adoption of our products have been really very encouraging. Norton, the iconic British brand was acquired by TVS in 2020. This year, Norton returns with unparalleled new high-tech products, a compelling combination of unique design and a unique Norton motorcycle experience. Those on social media are surely keeping themselves updated and all eyes are on the EICMA 2025 with the new Norton will break cover. In this context, the new India U.K. free trade agreement creates fresh opportunities and will provide a strong tailwind. And we are ready to capture these opportunities, this potential. Research and development. Ladies and gentlemen, our focus on R&D drives our ambition growth. In 2024-'25, we invested over INR 1,000 crores, around $120 million in research and innovation. This is the first time we have crossed such a landmark. And with over 2,000 engineers, we deliver many industry first and/or segment first interventions. And our ambitious teams will continue to shape the future of mobility, delivering intelligent technology at every customer touch point from what they see and interact with on [ TVs ] and consoles to vehicle sales and services. As these advances customer experience are backed by our digital transformation initiatives across the complete value chain. All AI-enabled customer experiences to predictive maintenance and manufacture, real-time supply chain visibility and global commerce systems. Our digital intervention have not only accelerated operational excellence, but have also empowered data-driven decision-making at scale. And we will continue to make meaningful investments behind AI, data systems, digital architectures, supply chain enablement, data privacy and especially also cybersecurity. Quality, ladies and gentlemen, quality, quality, quality is the bedrock of our success, and we are leaders in this domain. All our factories now hold the highest TPM certifications, Level 4, a first in the Indian 2-wheeler industry. This is a milestone which reinforces the DNA that powers TVS, a culture built on exact innovation and thoughtful engineering. And it's not a surprise that our products set industry standards. Our focus on quality is also validated by independent benchmarks like the J.D. Power 2025 India 2-wheeler study, where TVS outperformed, again, outperformed compared to the industry average. This consistent outperformance reinforces our position as a quality leader and reflects the trust and satisfaction of our customers worldwide. Ladies and gentlemen, you know I always use a very small formula. Business is people. And so we achieved all our outstanding results because of our incredible people. They are truly at the heart of everything we do. There is no greater validation of that than the exceptional high loyalty of our workforce. Our workforce is also more diverse than ever before. We invest considerable resources in training and capability building, not just on core skills, but also behavioral, environmental and social skills. And our talent development programs have earned national recognition. And I would like to take the opportunity to thank all our employees wholeheartedly to really thank all of our employees for their creativity, their passion and loyalty and their achievements. Thank you. Sustainability, over 8,000 workers and nearly 4,000 executives have been trained in sustainability awareness. Over 95% of our energy requirements are met from renewables, more than 95% outstanding. And all our 3 manufacturing plants in India have achieved water positive and zero waste to landfill certifications. And it's no surprise that a piece of [ Thiru ] farm in 1976 when TVS came to Hosur, the void of trees of wildlife is a certified bioreserve with the TVS Hosur factory spread over 50 acres. In fact, the water table of the region has increased since the setting up of the factory, benefiting farmers in the vicinity and floor and of the most elusive kind of flourishing here. Ladies and gentlemen, performance without purpose is incomplete, and we consider ourselves custodians of the future. Beyond the fence, our social initiatives under the Srinivasan Service Trust, SST and the TVS Screening Minds program is very, very successful. SST has touch lives at 2,500 villages. And for me, especially the women's self-having groups are unbelievably impressive, achieving unbelievable results. We are driving positive change through health, education, inclusion and livelihood programs. And for over 2 decades, Srinivasan Servicing Trust has worked with villages, helping them become self-reliant and break the cycle of general poverty. We have just been recognized for our work from the United Nations for our biodiversity programs to global ESG rating agencies for our sustainable performance. More than the awards, these recognitions validate our belief that businesses must be a force of good also for the society. Looking ahead, dear ladies and gentlemen, we are cautiously optimistic despite all the geopolitical and geoeconomic challenges. We experienced strong demand, both in India and the export markets and the macroeconomic climate is favorable and the EV ecosystem is evolving rapidly. And so TVS is ready and prepared to size every of these opportunities. I'd like to take this moment to welcome warmly Sudarshan Venu as our new Chairman. With global ambitions and deep Indian roots, TVS Motors future is secure, is really secure in his hands. Sudarshan [indiscernible] people first. And Sudarshan possesses a foresight ambition and perseverance to lead us and build an exciting future driven by technology and innovation and ensuring that TVS Motor continues to deliver exceptional value to customers and shareholders alike. And this I really can say, provides me a solid, very good feeling about the future path of the TVS way. All remains for me is to say thank you. To our shareholders, partners and every team member, thank you. Your trust fuels our company. We have come a long way together. And with your continued support, we will achieve even greater success. So thank you. So that leads me now to point #4, resolution to be approved by the shareholders. Let me move to the next point, which pertains to the 5 resolutions to be approved by the shareholders. The following ordinary resolutions are being considered at this AGM. First, the adoption of both stand-alone and consolidated audited financial statements together with directors' report and auditor's report on the company for the year '24-'25; second, the reappointment of Mr. Venu Srinivasan as a director liable to retire by rotation; third, not filling up the vacancy caused by the retirement of Professor Sir Ralf Dieter Speth as a director who does not offer himself for reappointment; fourth, approving the appointment of M/s Sriram Krishnamurthy & Co. a group practice company secretaries and sectorial auditors from fiscal 2025, '26 to fiscal '29 and '30. And fifth, ratifying the remuneration payable to MSCS under [indiscernible] cost auditors for the financial year '25 and '26. Voting. Ladies and gentlemen, the voting facility on the NSDL website will remain open up to 15 minutes from the conclusion of this meeting to enable the shareholders to cast their vote through e-voting. The results of e-voting will be declared on or before the 26th August 2025. And the declared results will be made available on the website of the company, stock exchanges and the NSDL. Thank you. Ladies and gentlemen, this brings us to Item #5 of the agenda, the Q&A session. Shareholders who have registered themselves as speakers are requested to speak now one by one. When all questions have been asked, I will ask the operational management to answer your questions. And now the moderator, Mr. Raja Prakash will call you one by one. Raja, please take over all the shareholders.

Thank you, Chairman. I will call the speaker shareholders one by one. Speaker number one, [ Mr. Manoj Kumar Gupta ]. Mr. Gupta, can you hear us?

Can you hear me?

Yes, we can hear you very well.

My name is [ Manoj Gupta ], [indiscernible].

Could you remove your microphone a little bit, please?

Now can you hear me? Thanks to the company secretary and his team to help us to join this meeting through VC. Sir, I have some few observations. I want to -- congratulations to Mr. Venu Srinivasan, sir, Chairman Emeritus on the imminent contribution for CSR activities. Sir, your commitment to social development and sustainability is truly inspiring, and it reflects the values that TVS Motors stands for. We are really proud of you, sir. Congratulations on the proposed new Norton launches, give more details and the investment going forward, sir. With this, I thanks to you and your team for the excellent result of the company for the year '24-'25 and convey our best wishes to Venu Srinivasan, sir. Thank you, sir. Thank you.

Thanks a lot, Mr. Gupta.

Second speaker, [ Mr. Abhishek ]. Mr. Abhishek? Mr. Abhishek, we cannot hear you.

Sir, first of all, I congratulate the management on the eve of 33rd Annual General Body Meeting. Sir, trust all is well with you and your family in this challenging situation. Our company deserves much more respect than the current market cap after completing more than a decade of successful operations, profitability and dividend history and becoming one of the strongest brands in the respective segment. Sir, I have only three questions, sir. Our sincere appreciation. First of all, our sincere appreciation to the outgoing Chairman for bringing a lot of success. And our congratulations to Mr. Sudarshan Venu for taking over the Chairmanship, and we are very confident that the company will further grow and reach new levels under his dynamic leadership. Sir, what is the share of our company in the presence in global market and what are the strategic steps for the coming future? I would like to know from you, sir. All your sincere efforts and hard work has translated into the numbers, and you are able to see the -- deliver the fruits today, sir. I'm really thankful to the entire Board of Directors for their sincere efforts in bringing the company to this particular direction and rewarding the minority shareholders in large numbers. Nothing much to us, sir. I wish the company and the Board of Directors a great success and prosperity in the coming future. And thank you for giving the opportunity, sir. Hope to see you in the upcoming AGM next year. Thank you very much.

Thank you.

[ Mr. P. Gopal ] speaker #3.

Speaker #3, [ Mr. P. Gopal ] has not joined the meeting.

Okay. We will go to the next speaker. [ Ms. Deepthi Desai ]. [ Ms. Desai ], can you hear us?

Yes, I can. Good afternoon, Chairman, sir, respected Board members and my fellow shareholders. I'm [ Deepthi Desai ] from Mumbai, a proud shareholder of TVS Motors and a member of Millennium [ Mams ]. I have two questions. Question number one is as follows. The annual report highlights that scooters, including EVs, are growing faster than motorcycles at the industry level. What are the key drivers of the scooter-led growth? And how is TVS leveraging its portfolio, especially new launches to capture this opportunity? And my second question is, with global EV penetration in the 2-wheeler segment nearing 25% and TVS currently at approximately 8% domestically, could you elaborate on the strategic road map the company is pursuing to accelerate its EV transition, both in India and international markets? And how do you plan to enhance your competitive positioning in this space?

Thank you.

The next speaker, [ Ms. H.S. Patel ]. [ Ms. Patel ], can you hear us?

Hello?

Yes, ma'am. We can hear you.

Could you please raise your question?