TVS to roll out iQube electric scooter in 20 new cities: Plans up to Rs 600 crore capex for FY22

It is planning to roll out its e-two-wheeler iQube in 20 new cities in the current fiscal. iQube was recently launched in Delhi, the second market, after Bengaluru.

By:Updated: Apr 29, 2021 8:15 AM

 

Having beaten the street estimates by registering a strong set of numbers in the fourth quarter of FY21, the Chennai-based TVS Motor Company has said it is planning to pump in Rs 500 crore to Rs 600 crore as capital expenditure in FY22, mostly into electric vehicles, emerging technologies and products, besides investing into TVS Credit, the group’s financial services company. KN Radhakrishnan, director & CEO, TVS Motor Company, told during an analyst call post releasing of the Q4 FY21 results that the company will be investing heavily into the electrical vehicle segment. It is planning to roll out its e-two-wheeler iQube in 20 new cities in the current fiscal. iQube was recently launched in Delhi, the second market, after Bengaluru. The company has also plans to expand the capacity and portfolio of e-2Ws.

“EV is the future technology and we are also planning to launch electric three-wheelers. Out of the total capex, we will invest around Rs 150 crore towards EV projects. We are studying the EV feedback and on the back of plan to launch the e-2Ws in 20 more cities, we will take a call on the capacity expansion,” he said. Growing ahead of the industry, TVS Motor clocked a revenue of Rs 5,322 crore for the fourth quarter against Rs 3,481 crore, in the corresponding quarter of last fiscal, registering an increase of 53%. The company reported highest ever operating EBITDA of Rs 536 crore, recording a growth of 119% as against Rs 245 crore. During Q4 2020-21, two-wheeler sales in domestic market have grown by 41% and international markets by 74% ahead of industry growth of 24% and 33% respectively.

Radhakrishnan said for the full FY21, while the two-wheeler industry de-grew by 12%, TVS Motor could restrict decline by 5%, on the back of strong portfolio and export market gains, even achieving market share improvement. Focused working capital management and improved operating performance helped the company to generate free cash flow of Rs 1,887 crore. These proceeds are used to reduce the debt. Lean stock with the dealers also helped to unleash the blocked working capital across the supply chain,” he said. According to him, the premium products have helped to grow its sales volumes. The company’s efforts in cost reduction initiatives including material cost reduction coupled with domestic and international markets’ growth have helped the company to stay ahead of the industry.

“International markets have given us good growth on the back of stable oil prices and increased forex availability. With opening up of the overseas markets much faster than the domestic, we expect our exports markets to sustain the growth momentum,” he said. On the future outlook, Radhakrishnan said localised lockdowns may hamper buying sentiment in the first quarter, but pan-India vaccinations may lead to growth revival in the second half of FY22.

Rural demand would remain strong on the back of a normal monsoon season and high crop yield. The company expects a further 1.9% q-o-q increase in raw material cost in first quarter of FY22. It hiked prices by 1% in 4QFY21 and 1.6% in April 2021.

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