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TVSL logged a strong Q4, with revenue up 34% YoY, led by 28% YoY volume growth and 1.5% higher ASP QoQ. EBITDA was up 26% YoY, with EBITDAM stable QoQ at 13.1%. The management guides for strong single-digit growth for the domestic 2W industry (aided by strong underlying demand). TVSL aims to outpace this via its diversified product portfolio (across ICE/EV scooters, premium motorcycles) and capacity expansion (by 1.5mnpa units in FY27 to 8.3mnpa units; expansion in FY28/FY29 is also under evaluation). Economy 2Ws are facing a challenge due to rising product prices and elevated fuel price fears; here, TVSL’s exposure is limited (5%/4% of its 2W/total volumes). E2Ws and E-3Ws are growing strongly, and momentum is expected to sustain in FY27, with TVSL targeting share gains aided by a strong multi-variant E-2W portfolio and recent product launches in E-3Ws. Commodity cost pressure is expected to persist. However, an improving product mix (higher share of scooters and premium motorcycles), strong scale benefits, and calibrated price hikes (35% of the 3-5% commodity cost impact offset so far) should aid in countering the pressure and improve margins. While logistics have been a challenge, export demand is robust across markets (Africa/LatAm/Asia) with TVSL gaining market share owing to its strong product portfolio. We continue to like TVSL on a structural basis, due to its premiumization-led growth, strong margin footprint, and being a key beneficiary of India’s EV transition (refer: Yet another mega shift in motion, Ather the front runner). We retain BUY and TP of Rs4,800, at 35x FY28E core PER.

Strong revenue growth led by volumes; EBITDAM stable QoQ at 13.1%

Revenue was up 34% YoY, led by 28% YoY volume growth and 1.5% higher ASPs QoQ. EBITDA was up 26% YoY, with EBITDAM stable QoQ at 13.1%. The ~20bps QoQ gross margin dip was offset by lower other expenses. Adjusted PAT was up 17% YoY.

Earnings call KTAs

1) The management guides for strong single-digit growth for the domestic 2W industry in FY27; while prices going up is a challenge, demand remains strong for TVSL, given its product portfolio. H2 could be better if conditions improve.

2) The Economy 2W segment will continue to face pressure from inflation and fuel prices, but TVSL's exposure is minimal.

3) TVSL expects to grow ahead of the scooter industry, driven by strong tractions for both ICE (Jupiter 110 and 125) and EV (iQube variants) scooters.

4) Commodity costs are being closely watched for Q1/Q2. Of the 3-5% commodity cost impact, ~35% has been offset via price hikes in domestic and international markets.

5) Cost reduction, improving product mix, scale benefits, and calibrated price hikes will help TVSL counter commodity related challenges.

6) There were some supply chain issues in Apr-26 (labor, gas, RM availability), but conditions are increasingly better in May-26 (much better production in the first 10 days of May; TVSL expects this situation to be behind in the next 2-3 weeks).

7) E-2W industry momentum is strong, and penetration is expected to increase further.

8) Exports are performing well across LatAm/Africa/Asia. Capacity is being expanded to meet demand, and TVSL is gaining market share, aided by a wide product portfolio.

9) Capacity is being expanded by 1.5mnpa units to 8.3mnpa units; further expansion in FY28/FY29 is also under evaluation.

10) FY27 capex: Rs35bn, covering new product development, capacity addition (Rs20bn), and R&D. Investments in FY27 to be ~Rs5-6bn lower YoY (bulk of Norton-related investments are now behind).

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