TVS Motor Company Ltd (NSE: TVSMOTOR) Q3 2025 Earnings Call dated Jan. 28, 2025
Corporate Participants:
K N Radhakrishnan — Director and Chief Executive Officer
K. Gopala Desikan — Chief Financial Officer
Analysts:
Annamalai Jayaraj — Analyst
Chandramouli Muthiah — Analyst
Pramod Kumar — Analyst
Kumar Rakesh — Analyst
Kujan — Analyst
Amyn Pirani — Analyst
Kapil Singh — Analyst
Parag Thakkar — Analyst
Jay Kale — Analyst
Raghunandhan N.L. — Analyst
Jinesh Gandhi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to TVS Motor Company Limited Q3 and FY ’25 Post-Results Earnings Conference Call, hosted by &arani Securities Private Limited. [Operator Instructions]
I now hand the conference over to Mr Annamalai Jayaraj from Batlivala & Karani Securities Private Limited. Thank you, and over to you, Mr Jayraj.
Annamalai Jayaraj — Analyst
Thanks,. Welcome to TVS Motor Company 3Q and Nine Months FY ’23 post-results conference call. From TVS Motor Company management, we have with us today Mr K N Radhakrishnan, Director and Chief Executive Officer; Mr K. Gopala Desikan, Chief Financial Officer.
We will — I’ll now hand over the call to Mr for the opening remarks to be followed by question-and-answer session. Over to you, sir.
K N Radhakrishnan — Director and Chief Executive Officer
Good evening. Good evening, everyone, and thanks for joining us today. Wish you once again Happy New Year and season greeting to all of you. We are extremely happy to inform that the company’s overall performance has been in-line with whatever we had planned. The new products, especially the all-new Jupiter 110, it’s doing very well in the market and very well-accepted in the market. Combined EV and ice, we have achieved the highest-ever operating EBITDA margin of 11.9%. Kindly note that this is without recognizing PLI benefit.
Now let me now take you through the company’s Q3 performance. The two-wheeler domestic ice sales grew by 5% compared to Q3 of last year as against industry growth of 1%. Two-wheeler international market company sales grew by 26% over last year. ICE total two-wheeler ICE sales grew by 9% compared to Q3 of last year and this is also better than the industry. EV two-wheeler sales increased by 57%. This quarter in Q3, we have done 76,000 units as against 48,000 units during the corresponding quarter of last year. Total sales of three-wheelers are at 29,000. During the quarter, company’s operating revenue grew by 10% at INR9,097 crores as against INR8,245 crores during last year 3rd-quarter.
On profit, during the quarter, company recorded an operating EBITDA of INR1,081 crores grew by 17% as against EBITDA of INR924 crores during Q3 of last year. The company’s operating EBITDA margin improved by 70 basis-points at 11.9% as against 11.2% during Q3 last year. And sequentially also we have grown by-20 basis-points. The company posted operating PBT of INR859 crores, recording a growth of 22% during this quarter as against INR702 crores in the 3rd-quarter of last year. Profit-after-tax grew by 4%, INR618 crores as against INR593 crores during 3rd-quarter of last year. During the nine-month period, the company’s operating revenue has grown by 13%. This year it is INR26,701 crore as against INR23,608 crores last year up to first-nine months.
PBT for the first-nine months grew by 19%, INR2,517 crores as against INR2,109 crores during the first-nine months period of the last year. Profit-after-tax for the first-nine months grew by 16%, INR858 crores as against INR598 crores during the first-nine months period of last year. On TVS Credit, we are extremely happy during this financial year. TVS Credit has added more than 3 million new customers. Cumulatively, TVS Credit has served over 17.7 million-plus customers till-date. Now the book size is INR27,190 crores, grew by 7% overall over Q3 of last year. Profit before-tax grew by 40%. Now it is at INR321 crores as against INR230 crores during Q3 of last year. Sequentially, PBT grew by 48%. Last quarter was INR216 crores PBT for TV credit apart from serving two-wheeler customers, TVS Credit is one of the leading consumer durable mobile phone finances. It has a fast-growing footprint in the used-car loans, tractor loans, used commercial vehicle loans and unsecured loans powered by robust new-age technologies and data analytics.
So overall, TV’s credit performance is really doing well. On Q4 ’24, ’25, as you know, the first-nine months of this year, Wahan has industry grew by 9% what is delighting is urban — the rural growth is slightly ahead of this 9% to be precise, it is almost 10%. And Q3 also, we have seen rural doing slightly better than urban. So a good rural coming back this year is going to help the industry. Higher investments in infrastructure is going to definitely help. And the reserve oil-water levels are very good this year. We are expecting an improved crop this year and that is also likely to help. And we are expecting Q4 to do well. Okay. The new Jupiter for TVS, we will confidently say that we will grow ahead of the industry thanks to the new product and the existing products are also doing extremely well in the ice ICE. On EV, the first-nine months of the period EV two-wheeler industry has grown 36%.
Penetration during this period is high 0.8%, slightly better than last year. IQube, as you know, is a very strong brand as a prominent brand in the EV segment, which is technology-led features and best-in-class quality. The company has introduced a new variance in IQ portfolio making electric mobility accessible to everyone. We have now three battery options, 2.2 kilowatts, 3.4 kilowatts and 5.1 kilowatt. All the iQube, the full range, the portfolio is getting a very good response from the customers. We will also come up with products this year. And about a week back, we have launched our three-wheeler TVS King EV Max. The TVS King EV Max combines advanced electric proportion with superior comfort and connectivity. It has got a blend of long-range, impressive acceleration, quick charging time and I’m very sure that it is going to give better return on investment for the users and it is going to help better earning potential for the customers. It comes with 179 kilometers of range, quick charging, okay.
We can do it in two hours and 15 minutes. It comes with smart features like TV Smart Connect and this also uses real-time navigation alerts vehicle diagnostics through their smartphones and it comes with definitely very good LED head lamps and tail lamp. So it is going to be one of the best offering in the market and we are pretty confident that with this product, we will become a prominent player in the EV three-wheeler. And as you know, the EV three-wheeler category is growing much faster. The penetration is already — while overall for the year it’s year-to-date is 21%, last quarter it’s 26% and we are expecting this to significantly grow in the coming months.
During — Bharab Mobility Global Expo, we will be partnering with Shimde. We have unveiled concept models and you know this is going to be in the space of micromobility and this partnership is going to be very, very critical and there will be quite a lot of learning. On international markets, we are witnessing improvement in retail better than the industry. During Q3, we witnessed improvement in Africa. We are expecting improvement from the current levels during — and this will also do — we will be better in Q4. We have entered into Morocco. This will add to our further growth momentum in North Africa. The HLX 125 gear, which is added in our portfolio last quarter is doing well.
We have launched this product in many key African markets. The response is very positive. Last-time I told you about LatAm, I think it is growing and these are the markets which is doing extremely well for the industry and we are growing month-after month-in this market and it’s very, very important for our growth strategy in international business going-forward. We are extremely happy that the Sri Langa is opening and Sri Lanka is very, very important in the Asia market. Nepal, we are doing well. All of you know that Bangladesh is going through some tough time, but it will come back, okay. And Middle-East also, we are doing well. Overall, we are extremely happy that the EBITDA margin has been growing for TVS Motor Company.
And now we are at the highest 11.9%. We are confident that the company will continue to leverage its growth, better product mix, sustained cost-reduction initiatives to improve profitability going-forward. We have very strong range of brands and we will continue to grow ahead of the industry, both in ICE and EV. In terms of — most importantly, this momentum in the market and the industry, we are positive about Q4 and we are expecting overall 2025 is going to be a good year both in domestic and international market for TV. Thank you.
Operator
Shall we open the line for questions?
K N Radhakrishnan — Director and Chief Executive Officer
Yes, please.
Questions and Answers:
Operator
Thank you. [Operator Instructions] The first question comes from the line of Chandramouli Muthiah with Goldman Sachs. Please go-ahead.
Chandramouli Muthiah
Hi, good evening and thank you for taking my questions. My first question is on the OBD2B norms, which I expect to be introduced on April 2025. So just wanted to understand what additional components we might need to add? Are there any price hikes we need to take and is there any pre-buy factor that we need to factor-in heading into that period?
K N Radhakrishnan
See, OBD2B, like you mentioned, it is next phase change. Definitely, we are getting ready with all our products and it will be available from 1st of April. Some of the products we will be launching soon. So — and you know, appropriate time I’ll tell you the cost increase and the price increases.
Chandramouli Muthiah
Just a follow-up on that. I think we had exactly two years back and I think the industry took between 1.5% to 2% sort of price increase at that point in time. So do we sort of compare similar to that sort of magnitude of price hike or is this going to be slightly different?
K N Radhakrishnan
Say this is like Phase A, this is going to be Phase B, okay. And we are looking at what are the changes in the components and what need to be done. But we are very confident that whatever price increase, it will be appropriate and it will be competitive in the market. And we want to grow in the industry. And what is likely to happen according to me, these price increases are not going to be as high as what you have seen in BS4 to BS-VI, okay. It will be, in my opinion, I can’t put a number to it, but I’m very sure it will be affordable from the customer point-of-view.
Chandramouli Muthiah
Got it. That’s helpful. My second question is just on the gross margin. So we did see an increase in electric two-wheeler mix this quarter, but gross margin has been quite stable. So just want to understand what were the drivers that helped maintain very stable gross margin this quarter in-spite of increasing electric two-wheeler mix.
K N Radhakrishnan
I think the most important thing is, if you look at our gross margin, we have been fairly steady. There may be some 20 30 basis-points change. Say, between Q2 and Q3, there is not much of a difference in our in our material cost or whatever. I think the continuous focus on the product mix and the material cost-reduction. And price increase during this quarter was practically insignificant. I think very, very small proportion. So overall, I think what is most beneficial to the company is the health of the product mix and also the material cost-reduction — sustain material cost-reduction. And commodities also I would say it is flat. I think there was no significant change. There may be some material which would have gone up, but equally something has come down. So it is practically flat. So this is between Q2 and Q3. And if you compare between last year to this year, of course.
Chandramouli Muthiah
Got it.
K N Radhakrishnan
Cost-reduction also and there was a little bit of price increase, but the price increase was only marginal, if you ask me.
Chandramouli Muthiah
Got it. That’s helpful. And just lastly, a housekeeping question on export revenues and spare revenues for the quarter, if you can share.
K N Radhakrishnan
Give a minute, a new web minute, please. Export revenues are around INR2,018 crores and spare parts just a minute about INR950 crore.
Chandramouli Muthiah
Got it thank you very much and all the best.
Operator
Next question comes from the line of Pramod Kumar with UBS. Please go-ahead.
Pramod Kumar
Yeah. Thanks a lot for the opportunity, sir, and congratulations on a decent set of numbers. Sir, my first question is on the operating leverage or the lack of it, because if you look at the first — this quarter numbers like your employee cost and other expenditure grew by like 25% plus versus a revenue growth of 13% and even if I look at the first-nine months, we have seen 180 bps increase in employee and other cost expenditure as a percentage of revenue and they’ve grown significantly out-of-the revenue growth. So I understand that this — a lot of this is going towards capability building on new technologies, manpower hiring and all that. So if you can just help us understand, by when do you expect the inflation or the growth in these line items to kind of moderate so that we start seeing the benefit of operating leverage. The reason I’m asking this is like last four years almost the employee cost has compounded by 20% and we can see the benefits of that in your products and the market-share gains. But just trying to understand, are we expecting a moderation in the — the growth of these expense line items so that we can see some operating leverage benefit?
K N Radhakrishnan
See, the answers are there in your question itself. I think what is most important is TVS has got a strong new product development capability, R&D capability, and we come up with new products practically every year. And as I said earlier, we have added significant capability building in software, digital, almost I said last-time, almost 500 people we have added in this category. And this is definitely while it is going to help the EV and the EV product development. You can see our TVS Max, the King Max, you will see it is practically so many things are digitally connected. It is very advanced in terms of best-in-class features because I think we want to give the best to the customers in terms of technology, capability, in terms of connectivity. All these are investments, but we look at — like I said, these are investments not cost. I’m very sure these capabilities what we are building will also help in ICE because ICE customers are also now looking at these kind of technologies.
And in exports also, many of these products are likely to do extremely well. So according to me, investments behind employees, employee capability building, employee costs will continue because the products are required and we have an ambition to get into Europe. Now after that we want to look at global markets with our EV products and some of the ICE products so the top-line can come only with the right kind of people and investment behind people, both on a new technology area, capability building and software as a capability we are now investing.
Pramod Kumar
No, under sir, I understand all of that. Just trying to understand whether we’re going to see some moderation in the rate of growth of these expense lines or nothing else and just to be more for FY ’26, ’27, I’m not looking at the immediate quarter, but just if you can help understand whether we’ll expect any moderation in the growth rates or they’ll continue to grow significantly out-of-the revenue growth.
K N Radhakrishnan
I hope all of you are happy with 11.9% without the PLI. Okay. What we need to look at is, as a summary, is the company improving quarter-after-quarter EBITDA, including EV plus ICE, okay. Each line we can optimize, but then we will not do the best for the investments on new product, technology, capability building. Okay. While you manage the quarter, I don’t know whether that is the most important. Most important is managing the customer, future, technology, looking at — because any investment, it will start yielding results in two to three years.
Pramod Kumar
Okay. After I understand. And the second linked to the comment you made on PLI, by when do we expect you to start receiving the PLI amount, sir, so that we can start recognizing that in the revenue numbers and the margin numbers?
K N Radhakrishnan
See, all the IQ portfolio are approved or PLI, okay. And like we said last-time, the audit process, everything is in the advanced-stage and you will see the PLI benefits relating to the whole year will be accounted in Q4. Okay, that is our plan. And going-forward, after that, it will be every quarterly basis. So we are expecting definitely some decisions to be taken in the last quarter.
Pramod Kumar
Okay. And sir, on the export market outlook, if you can — hello. Hello?
K N Radhakrishnan
Yeah, please.
Pramod Kumar
Yeah. So on the export market, sir, if you can just help us understand while we are doing well, we are gaining market-share. But in terms of the medium-term plan for the next couple of years, where do you see TVS’s export volumes as in terms of overall portfolio for two-wheelers, sir? Because as you said in the opening remarks, you are kind of still ramping-up on Latin-America. I think Brazil is yet to be entered. So if you can just help us understand that. And also final statistics on iQube, how much of the network is already selling iQubes, because I understand you’re not selling at all your outlets at this point of time, including the sub-dealers, these two questions, sir. Thank you.
K N Radhakrishnan
I’ll start with IQ. I think we are at about 900 dealerships in India and there is still opportunity to sell many main dealerships and then we ought to look at other markets in India, that is suburban and other areas. On export, one correction, we are already selling in Brazil, okay. Our market-share may be small because Brazil is a huge country. As a LatAm, our presence we have started in the last couple of years focusing. And any market when you try to enter, first, you need to understand the consumers, you need to understand, build the brand. Okay, this is exactly what we did in Africa. Today, in Africa, we are a very prominent player. So like that, now we have started focusing on LatAm, looking at-market by market, having good distributors, looking at service, spare parts, availability, product, technology, brand-building. So I’m pretty confident that TVS as a brand will have huge opportunity going-forward in LatAm.
Pramod Kumar
Thanks a lot, sir. I’ll come back-in the queue. Thank you.
Operator
Thank you. Next question comes from the line of Kumar Rakesh with BNP Paribas. Please go-ahead.
Kumar Rakesh
Hi, good evening. Thank you for taking my question. My next question was. Yeah. Yeah. My first question was around the investments that you have made in the international businesses. Have you taken the fair-value assessment of all the international subsidiaries recently or which all are tending to be done? I see that you have taken some write-off in this quarter. So for which entity is that and which all entities are yet to be evaluated for that?
K N Radhakrishnan
Yeah. See, we do fair valuation for all our investments and what is being written-off around INR41 crores, which is there, it relates to a TV supply-chain investments what we have made where the market has corrected and the previous quarters, we have also recognized the fair valuation gain on that. So that is what is represented in that INR41 crores. All other investments we test for fair valuation and they are — they are — they don’t require any intervention in the valuation.
Kumar Rakesh
Okay. Related to that, during the quarter, you invested in raised your stake and that was through secondary of sale of shares. So can you just help understand that what is the rationale behind making that to be a subsidiary, especially when it is in a resale business, which largely many of the other OEMs have built by themselves. So what is the unique use-case that we are looking at this business. We have raised their stake and want this to be our subsidiary.
K. Gopala Desikan
I think these are — these are part of the auto business. So we felt that it is better to be part of TVs motor. That is only a simple rationale.
Kumar Rakesh
I think my question was more from external business going and investing in that instead of building by ourselves. So what is it the unique space that this startup brings and that we thought that we’ll not be able to build answers.
K N Radhakrishnan
Yeah, but you know, we have a significant proportion of stake in DriveX. So the entire capability or trying to support in-building the Drivex is from TVS Motor. And it has got very-high level of synergies with the existing business of TVS Motor. So I think — and you know the importance of used vehicle business in India.
Kumar Rakesh
Got it. Thanks. My second question was around the TVS credit. So you spoke about that it’s a very diversified business now outside of two-wheeler business as well. And notice that the AUM growth of that business has been slowing down quite sharply from more than 20% growth a few quarters back, now about 7% growth. So what is driving that slowdown in the AUM growth of that business?
K. Gopala Desikan
No, there is no slowdown. Basically, the credit to particularly the risky customers and the unsecured lending, we are quite cautious. And the book size is a healthy book size at INR27,190 crores. And if you see even the debt-to-equity, we are just at 5.2 times now and it is — and again, the capital adequacy ratio is extremely healthy at 19.4% and therefore there is no slowness in the growth and we have tightened certain credit norms and we are that’s the reason. Otherwise, this is a very healthy portfolio and the book what we are carrying is a very good and healthy portfolio what we have today.
K N Radhakrishnan
We look at the competitive landscape and we look at without compromising on the quality of customers. That is — that is a fundamental when we look at the growth.
Kumar Rakesh
Got it. And I know that the credit cost has increased or has elevated at about 4.9%. So how is the delinquencies trend that you’re seeing in that?
K. Gopala Desikan
Sorry, I couldn’t understand. What’s the question?
Kumar Rakesh
So the credit cost of PVS credit is about 4.9% for the December quarter. So I was asking around the delinquencies, how is that trending?
K. Gopala Desikan
No, the delinquency is — I mean the — I can say talk about the gross NPA is at 3% and the collections are quite healthy and we carry a decent provisions more than what is required under the RBA regulations. The collections are also quite healthy. We have collected close to INR7,000 crores during Q3 even compared to INR5,000 crores comparable quarter last year. And the disbursements have also been quite healthy at INR7,400 crores this quarter as against INR6,900 crores in the comparable last year quarter.
Kumar Rakesh
Got it. Thanks a lot for taking my question.
K N Radhakrishnan
And if you overall look at the performance of TVS Credit is one of the outstanding performance. PBT has grown more than 40% and INR321 crores.
K. Gopala Desikan
And the rating agencies have also upgraded the rating from AA plus or stable now.
Kumar Rakesh
Got it. Got it.
Operator
Thank you. Next question comes from the line of Kujan [Phonetic] with Bank of America. Please go-ahead.
Kujan
Yeah, hi. Thanks for taking my question. And apologies if this is repetitive. Just trying — just first question on the investment in subsidiaries. This INR740 crore, could you give us some sense where has this gone? And also, I do see the losses have certainly come down on subs in this quarter. So if you can give a little bit of color on what’s really happened on the subs performance besides the TVS credit.
K N Radhakrishnan
See, one is the investments in TVS credit. After that, predominantly it is. And like I said, the good news about Norton is whatever we have committed, the products are getting ready. The first product should be ready by end of this year and a few products will be ready in the beginning of next financial year. So I think, ’25, ’26 is going to be — the financial year is going to be very, very important in terms of product readiness and then not in getting into the market. So all the investments are practically supporting this development, getting ready for the product readiness in the market, okay. And there are investments related to other subsidiaries like e-bikes and investments related to the new technology areas in Singapore, TV, Singapore. Okay. And we are also investing in setting up a new hub in Dubai for international business because we see a huge opportunity in Africa, Middle-East and Europe.
Kujan
Okay. And anything like on the losses, like they’ve come off. So is it that or the e-bicycle business where we are seeing some worst is behind and losses are shrinking. Any comments around that?
K N Radhakrishnan
See, the e-bike business, you know that overall the industry has significantly come down because of the Europe going through a lot of challenges. And you know all the players in this market, I think we are focusing much more on deciding which are the outlets which are you know, cost-competitive and which are future required. So a lot of focus in terms of cost-reduction, working capital management because we feel that in a couple of years’ time, the e-bike industry will come back-in Europe, okay. And there is a lot of learning and we are also investing in some products. So this is definitely going to help in coming back with the e-bikes in the future.
Kujan
Okay, got it. And my second question was a little bit more on the product strategy. At the Bharat Mobility Expo, you had two interesting products. One was the CNG display and the other one was the 300cc bike. Anything that you can sort of talk about how soon should we expect these coming to-market? Any broader strategy around both these product segments, CNG scooter and 300cc?
K N Radhakrishnan
See we have a very strong R&D and design capability and these are concepts what we have demonstrated there. And appropriate time we will decide which type of products to be brought into the market. You would have seen about a week back our new three-wheeler EV King EV Max. So these are opportunities to showcase our capabilities are all concept bikes what we presented there. But I can assure you that based on the customer feedback, the industry opportunity, we will — we will invest in some of these products going-forward.
Kujan
Okay, got it. Thank you so much.
Operator
Thank you. Next question comes from the line of Amyn Pirani with JPMorgan. Please go-ahead.
Amyn Pirani
Yes, hi. Thanks for the opportunity, sir. Sir, two questions from my side. First question is, you know, you have recently launched the electric three-wheeler and the features and the pricing seems quite attractive. I don’t know if you mentioned about this in the past, but how do you see the as a category? And is that something also which can be a business opportunity for you in the future.
K N Radhakrishnan
You know we always first of all the TVS King EV max you know it comes with best-in-class features, sustain class features in terms of many things which we offer. Like I said, you know, this is the — this is the product with 179 on single charge, you can get the range and it has got a blend of both the impressive acceleration, excellent range and quick charging. So we — from the point-of-view of the customer, this product, I’m very sure it will — it will help the Indian three-wheeler industry, not only Indian three-wheeler EV industry, but we can definitely look at exporting this.
Now coming to the category, I think we are closely understanding. See, the good thing about EVs is we have a strong R&D and design capability. So we can always come back, we can reflect, okay. At this point of time, the full focus is on TVS, EV, MAX and how do we go to a prominent player in this category because this category itself, the penetration is growing disproportionately. My memory is right, in the last few quarters, it is growing at a CAGR of 84% and already we are seeing close to 30% penetration, which is very, very healthy number. So we want to secure a good position in this category with the launch of TVF King EV Max.
Amyn Pirani
Okay. Thank you. Sir, secondly, again, apologies if this has been addressed earlier. I joined a bit late. What is the — like the rationale of merging Sundram Auto components? And is there a plan to grow that business? And correct me if I’m wrong, currently, this is 100% supplying to you or is there any external revenues that this entry generates?
K. Gopala Desikan
Okay. Okay. This is a plastic business, 100% owned by TVS Motor Company. We are in the process of selling that business and the company with the cash it is going to generate out-of-the sale and the 2,400 odd acres of land which is very nearby to our factory, this gets merged with TVS Motor Company. There is no business that will get transferred or an additional revenue that is going to come to TVS Motor. The company, which is completely won’t buy it after generating a cash on-sale of a business and the remaining assets will get merged with TVS Motor Company.
K N Radhakrishnan
And currently, 80% of the sales is serviced for TVS, remaining 80%, 85% 20 — maybe 15% to 20% with other customers.
Amyn Pirani
Okay. But going-forward, this entity will not have any business. It will just be entity will land and cash basically.
K N Radhakrishnan
Yes.
K. Gopala Desikan
Yes.
Amyn Pirani
Understood. Thank you.
Operator
Thank you. Next question comes from the line of Kapil Singh with Nomura. Please go-ahead.
Kapil Singh
Yeah, good evening, sir. Just on the electric scooter business, I wanted to ask, we are touching almost 900 investors. What percentage of the scooter market does it cover? And then secondly, in terms of the customers we are getting now, are these — you think are these scooter — existing scooter customers who are shifting or are there additional motorcycle customers also shifting towards electric scooter?
K N Radhakrishnan
Yeah, TVS iQube is an excellent brand and thanks to all the customers who are buying this product. Yeah, if you recollect, I was highlighting that if you include EV also into the two-wheeler industry, I was highlighting that last year the EV — the scooter category share was about 31% 32%. If I include both ICE and EV scooter, it is already now moving close to 40%. So the most important is market or scooter categories expanding in India, okay. This is exactly what I was highlighting about two years back. Indian customers like especially urban and semi-urban, they like scooter as a category because it gives lot of convenience to the day-to-day usage, okay. So that is one of the predominant reason.
So when the market is expanding and the overall scooter category is growing, we are present with the iQube in the EV category. We are also present with Jupiter, and even in Jupiter, we have a 110 series, there is a 125 series, is there and for the entry-level customers, we have. So we have a strong scooter portfolio, okay. And we will — we will definitely grow ahead of the industry with the kind of investments whatever we have done on the product side.
Kapil Singh
Yes, sure, sir. These 900 dealerships, they would cover what percentage of the scooter market?
K N Radhakrishnan
See, we can — we have another, including the branches of the main dealers. We have almost 1,400 main dealers. So we are very systematically growing that. Then we can always look at you know, the next level dealerships. So this is a very systematic investment in the network and expansion of the network.
Kapil Singh
Okay. And sir, on the motorcycle portfolio, can you give some color? Just firstly on the industry also, the growth has been quite tepid, especially in the second-half. And for TVS as well the growth rate has been a slow by the standards that we set. So just if you could give your views on both.
K N Radhakrishnan
Overall, you know, we have done much, much better than the industry. I hope you can see the numbers. I don’t want to say anything beyond that, okay. And I look at the total portfolio, I don’t look at product-wise. First step is to grow ahead of the industry in a very, very, very structured way. Number two, there are of course, categories, for example, the economy category, the category, there are some challenges, but the good news is the rural is responding this year-after a long-time, okay. But still there are pressures on the economy category and the category, because the buying power, while it is going up, but there are some challenges they are facing, okay. So it may take a little longer time. But overall, this year so-far, the industry has grown 9%, 9% is CAGR is a very, very healthy growth rate.
Kapil Singh
Sure, sir. No, my question was more of the recent data we see that has seen quite a bit of weakness. So was that more temporary factor —
K N Radhakrishnan
For example, the month of January, the first two weeks, the Bahan growth rate is only 4%, I understand. But it will grow. We have just started January. Now February is there, March is there, okay. Last quarter also, if you look at it September, October, November, October, November, December, we saw a very healthy growth rate. Any growth rate around 9%, 10% is a good growth rate. As of now, it has started well. That is the way I look at it. And so-far market is holding on okay only area where if you ask me it can do better is the entry-level motorcycle moped these are the area.
Kapil Singh
Sure, sir, sure. Thank you so much.
Operator
Thank you. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Parag Thakkar with Fort Capital. Please go-ahead.
Parag Thakkar
Hello. Am I audible?
K N Radhakrishnan
Yeah, yeah.
Parag Thakkar
Yeah. Thanks a lot for taking my question and congratulations for excellent numbers. I just wanted to know that when that the PLI benefit margin of 1.5% will reflect in our quarterly results.
K. Gopala Desikan
What is that 1.5%?
Parag Thakkar
A PLI benefit, which I think our peers have already recognized that.
K N Radhakrishnan
We don’t know about this 1.5%.
K. Gopala Desikan
It’s a new number you are saying. We don’t know this. It only talks about the minimum of government says 12% or yeah, 12% on the EV-related business and 13% on revenue subject to satisfaction of all other criteria, which we have already satisfied and we will be recognizing based on the EV-related sales going-forward. This 1.5%, we don’t know what that number is, please.
Parag Thakkar
So EV benefit where it will come, will come in from retrospective fact or from Q4 on.
K. Gopala Desikan
No, it is far from April, but it depends on when we have launched and when we got the certificate, but what we will be recognizing in Q4 is our eligible percentage for the whole year.
Parag Thakkar
Okay. Okay. Okay, okay, okay, great thanks a lot for the same and if I heard correctly that in January basically in two-wheeler we are doing extremely well because there was and he was very bullish about the January uptick in two-wheeler sales both in ICE and electric, I think. Yeah. So whether you would be able to throw some light on that, that March quarter and the upcoming year looks very good from both ICE and EV sales from TVS perspective. No, I’m not asking from the industry perspective. Of course, he has said that two-wheeler industry is going to grow in double-digits in this year and you will outpace the industry.
K N Radhakrishnan
But you have said — you have said the industry is expected to do well in 2025, ICE plus EV and TVS with the kind of products what we have, we will be growing faster than the industry. Absolutely right.
Parag Thakkar
Okay, sir. Okay. Thanks a lot. That helps me a lot. And okay. Thanks, sir. Congratulations. Thanks.
K. Gopala Desikan
Thank you.
Operator
Thank you. Next question comes from the line of Jay Kale with Elara Capital. Please go-ahead.
Jay Kale
Yeah. Thanks for taking my question and congrats on a good set of numbers. Sir, my first question is regarding EV two-wheeler. We’ve seen that the penetration for the industry is hovering around at 6% odd percent, while we have done well. But what hold into you needed for this penetration to move-up further because couple of years back, the broad expectation was that if EV two-wheeler prices, cooter prices come down to closer to ICE vehicles, there will be an inflection point. Now as we see it broadly, the industry has reached similar to ICE prices of scooters. What is it needed for it to further give a Philip probe in terms of EV adoption? Is it that motorcycles will only drive the further EV adoption over here or where are we seeing the gaps in EV scooters as an industry?
K N Radhakrishnan
According to me, you know 6% in such a short-time is one of the best numbers I have seen on EV adoption. Okay. What is most important is customers and customers liking the products and the technology, which according to me is happening pretty well. Okay. Now definitely, you know, going-forward, more new products will come, new players will come, the market will be competitive. I think when you have new products or new segments, I think that is the time you will see definitely good growth. According to me, EV is growing pretty well in India because these are all personal users, personal owners, okay, please understand customers are agnostic to any technology. So customers have to like it and customers’ liking has started. So we have to be patient, it will grow and with new segments and the new products, it will further grow. That is our understanding and estimate. And as the volume go up, everything will fall in-line, the cost will fall in-line, many things will fall in-line.
Jay Kale
Understood. And if you can just share your EV contribution of for this quarter in terms of revenues like you had done last quarter. And just a few, you know clarity on the Norton launches as well as the Hyundai three-wheeler that you mentioned, the timelines and the kind of product positioning that would have and would we just be contract manufacturing or what would be our role in this and how would it plays?
K N Radhakrishnan
See, this is the Shundai and TVS partnership is a great partnership. At this point of time, you know, it is going to be focusing on micro mobility and there is a huge opportunity there. The project line lines, investments, etc., et-cetera, we will update once we once we are closer to our complete plans. Okay. On coming back to Norton, I already highlighted you that financial year, that is where you will see the products coming from and I’m very confident that with our R&D and our capability, you will see many of the — these products definitely, definitely delighting the customer in many parts of the world. Notton is a great brand. It’s in the super-premium, a great brand. So we are pretty positive about that. What was your third question?
Jay Kale
On the EV contribution this quarter in terms of revenues like you had mentioned last quarter.
K N Radhakrishnan
I think EV, I think the revenue is around INR800 crores.
Jay Kale
INR800 crores. Okay, okay, understood. Great. Thanks and all the best. Thank you.
Operator
Thank you. Next question comes from the line of Raghunandhan N.L. with Nuvama Research. Please go-ahead.
Raghunandhan N.L.
Thank you, sir for opportunity and congratulations on the 11.9% margin. Sir, firstly on the margin side, you have been doing very well over the last few years and going-forward, material cost-reduction, premiumization even the geography mix improvement, all these are triggers. If you can talk about efforts in this regard and how you see the benefits to flow-through in future.
K N Radhakrishnan
See, the most important to me and for our company is delighting the customer. For delighting the customer, one, the existing brands have to do well and you have to come up with new products, new technologies, new innovation, best-in-class features because you have to keep giving something new to the customer so that he loves your product. And post that you have to give very good service service, everything, every element of your customer looks at the value. The moment you see you offer value to the customer, customer will definitely a start investing behind the brand, they will buy, they will recommend. So that is number-one.
Number two, what is most important is top-line. You know with the customer delight, the top-line will grow. And like I always say that we don’t — we don’t — we ask all our dealers to buy on cash-and-carry. We don’t allow them to keep more than 30 days of stock. We want the fresh vehicle to support the customer. And we have very strong brand. If you look at Jupiters, Jupiter is there, Jupiter 125 is there, then you have, we have on one-side, Apache brand, excellent products from 162, 164, then 180, then 200 and the 310 series, okay. Then on other side, you have which is at 125 CC, then entry-level products. So we have the best range starting from MOPED to scooters to motorcycles, that is very, very critical because when customer comes in and of course, TC so first to have after the customer satisfaction, have a range of products so that the customer get delighted.
And I — whatever I said on premiumization with the kind of infrastructure premiumization is continuing, okay. And people — people are investing behind great brands and they are looking at products with excellent features, okay. So this will continue. The variant strategy will continue, product mix strategy will continue, geography focus will continue and exports you have seen our numbers. There is a huge opportunity in exports for TVS Motor Company because we have HLX. HLX is a great brand. We came up with one trend of 100 and 125, now we have 150. So investment behind products, then coming up with premiumization and of course, course the top-line goes up, then that is the time to focus on material cost. And it is a sustained material cost-reduction. So all put together is what is delivering and helping and without sacrificing the investment on people, technology, quarter-after-quarter, we are able to grow our EBITDA. And this journey will continue.
Raghunandhan N.L.
Got it, sir. Thanks for the detailed answer. Sir, in terms of demand outlook, how would you see domestic market in FY ’26, given that we have not yet reached the previous peak so — and rural is also doing well. How would you see the industry growth panning out?
K N Radhakrishnan
See, we are working out for the next financial year the numbers, but my feel of the last nine months gives me a lot of confidence because this is the first year I have seen rural matching or slightly ahead of urban, which is a very positive news. The area possibly things can improve is the entry-level motorcycles and MOPED, but I am also confident with the monsoon being very good this year. Okay. I’m expecting the same growth momentum of last year will continue in 2025. That detailed working out is going on as a part of the budget for next year. And as far as TVS is concerned, we are looking at, you know, continuing our growth momentum ahead of the industry with the current of products and the brands and the kind of investments we are making in delighting the customer. So overall, I think ’25 ’26, I’m pretty positive. I’m confident the industry should do well.
Raghunandhan N.L.
Thank you very much, sir. And on the investment side, we have already done INR1,400 crore in the first-nine months. How would you look at the full-year number or Q4, what would be the number? And do you think this INR1,000 crore-plus run-rate will continue for FY ’26?
K N Radhakrishnan
See, these investments are predominantly for — for product development activities on North and some product development activities for e-cycles, okay. And please understand products are critical in auto industry, okay, very, very critical. And the benefit of that, you will start getting one year later, two year later, okay. On the investment side, you know, possibly we will be around INR1,700 crores year-end outlook, okay. So — but these investments are going to be the foundation for the future.
Raghunandhan N.L.
Got it, sir. Understood. Thank you so much and all the best.
Operator
Thank you.
K N Radhakrishnan
Can we take last question please?
Operator
Yes. Yes. Due time constraints, we will be taking the last question. That is Jinesh Gandhi with Ambit Capital. Please go-ahead.
Jinesh Gandhi
Yeah, hi, sir. My question is on Northon investment. So now given we are nearing completion of product development, do we need to invest further in Norton beyond what we have already invested?
K N Radhakrishnan
See, first of all, the products, whatever we have invested, we have to put into the market. Okay, number-one. Number two, we need a range of products, please understand because our aspirations are very-high on Northam. And please understand the consumer, when he looks at it, he will expect a range of products. So whatever we are investing that will be available, okay. And we have already said that we will be looking at first year that is ’25, ’26 and there will be launches here after and possibly in the third year also. So we need to look at a sustained investments behind product development, yielding to a good range of by motorcycles and it should be available globally in every part of the world. So at this point of time, whatever I’ve highlighted is for ’25, ’26 got it.
Jinesh Gandhi
Got it. And secondly, in the domestic market, some of the financiers, including banks and NBFCs are highlighting increase in delinquencies on the consumer loan side, two-wheelers and that way. Are we seeing any signs of stress on finance availability for our two-wheeler customers or that is yet to be with — it’s not yet visible on-the-ground?
K N Radhakrishnan
See, these are part and parcel of — part and parcel of growing. When you — when you substantially grow, already my colleague Deishi can also highlighted that we — in TVS credit, we are very, very conscious. We give only quality customers the kind of lending, okay, that is the reason our delinquencies are under control, okay. Equally, we also look at diversifying the portfolio so that every — every — every segment we are present. So I can’t say that this is something we have to constantly look at it and correct it. Quarter-after-quarter, we have to look at it now the market is moving? No, this is a continuous part of the journey.
Jinesh Gandhi
Okay. Got it. Okay. And just bookkeeping questions to Mr. So what was USD-INR realization in this quarter and how much should be capex for the full-year FY ’25?
K. Gopala Desikan
One second. Realization for the quarter is INR84.
Jinesh Gandhi
Okay.
K. Gopala Desikan
And capex, you ask CapEx, right?
Jinesh Gandhi
Yeah, for FY ’25.
K. Gopala Desikan
Capex for the year you are asking or for this quarter?
Jinesh Gandhi
Yeah. For the quarter and the year.
K. Gopala Desikan
INR340 crores.
K N Radhakrishnan
Yeah. The capex will be around INR1,300 crores.
Jinesh Gandhi
Got it. Got it. Great, sir. Thanks and all the best.
K N Radhakrishnan
Thank you. Thank you, everyone. Thank you, everyone. And like I said, you know, the growth trajectory and we have posted — we continued our growth trajectory and we posted the highest operating EBITDA of 11.9%, okay. This is consistently we are improving quarter-after-quarter with the best-in-class quality and our unwavering focus on consumers along with our strong portfolio of brands starting from, Jupiter, IQ, Raider, NTAC, Star Range, HLX Radeon, TVS King and TVS Ronin and the recently launched TVS — EV Max, King EV Max. We will do pretty well-ahead of the industry, both in domestic and international. We will continuously improve our EBITDA by focusing on product mix. We’ll focus on our leveraging the volumes and sustained cost-reduction, we’ll continue to improve our EBITDA margin going-forward. Thank you. Thank you for your time and continued trust in TVS Motor Company. Thank you.
Operator
[Operator Closing Remarks]