TVS Motor Company Ltd (NSE: TVSMOTOR) Q4 2025 Earnings Call dated Apr. 28, 2025
Corporate Participants:
K.N. Radhakrishnan — Chief Executive Officer
K. Gopala Desikan — Chief Financial Officer
Analysts:
Annamalai Jayaraj — Analyst
Binay Singh — Analyst
Chandramouli Muthiah — Analyst
Pramod Kumar — Analyst
Gunjan Prithyani — Analyst
Vipul Agrawal — Analyst
Sonal Gupta — Analyst
Amyn Pirani — Analyst
Kumar Rakesh — Analyst
Pramod Amthe — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 FY25 Earnings Conference Call for TVS Motor Company Limited. [Operator Instructions]
I now hand the conference over to Mr. Jayaraj. Thank you and over to you.
Annamalai Jayaraj — Analyst
Thanks, Mike. Welcome to TVS Motor Company 4Q FY25 post-results conference call. From the management side, we have with us today Mr. K. N. Radhakrishnan, Director and Chief Executive Officer; and Mr. K. Gopala Desikan, Chief Financial Officer.
I’ll now hand over the call to Mr. K. N. Radhakrishnan for the opening remarks to be followed by question-and-answer session. Over to you, sir.
K.N. Radhakrishnan — Chief Executive Officer
Good evening, everyone. I hope all of you can listen to me. Thank you for joining us today. Seasons greeting to all of you and your family members. On the overall performance of TVS Motor Company this year, we are delighted to share that during the year company surpassed all its previous highs, achieved the highest-ever sales of 4.7 million units, posted the highest-ever revenue of INR36,251 crores, highest-ever profit of INR3,629 crores. We would like to thank all our customers, all our investors and every employee in the company for this outstanding achievement.
Combined EV and ICE, we have achieved the highest-ever operating EBITDA margin of 12.3%, okay? This 12.3% is including the PLI benefits. And we consistently — if you look at quarter-on-quarter, we are at 12.5% EBITDA, including the PLI benefits. The report what you will be seeing is about 14% EBITDA, because this quarter we have accounted for the year PLI benefits.
Now coming to sales, the two-wheeler domestic ICE sales grew by 9% over the last year, as against industry growth of 7%. The two-wheeler international market, the company sales grew by 23% against the industry growth of about 21%. Total ICE two-wheeler grew by 12% compared to the last year as against industry growth of 10%. On — EV two-wheeler sales increased by 44% to 2.8 lakh units as against 1.94 [Phonetic] lakh units during last year. For the sales of three-wheelers are at 1.35 lakh units and last year was 1.45 lakhs.
During the year, the company’s operating revenue grew by 14%. Now it is at INR36,251 crores. Last year, the whole year, the revenue was — operating revenue was INR31,776 crores.
Coming to profits, during this year, the company recorded the highest-ever operating EBITDA of INR4,454 crores, a growth of 27% as against the EBITDA of INR3,514 crores during last year. Company’s operating EBITDA improved by 125 — 120 basis points at 12.3% as against last year’s 11.1% during last financial year. This was primarily possible through the robust growth in revenue, sustained cost-reduction initiatives implemented by the company. As I highlighted, this 12.3% includes the PLI benefits for the company for the year.
PBT for the period grew by 31%, INR3,629 crores as against INR2,781 crores during the last year. Profit after-tax grew by 30%, which is INR2,711 crores as against last year’s INR2,083 crores. During the year, company has generated operating cash flow post capex of INR2,486 crores.
On Q4, total — the two-wheeler domestic ICE sales grew by 6% compared to Q4 of last year. While all of us note that the industry was almost flat, there was a marginal decline actually. In two-wheeler international markets, company sales grew by 32% [Phonetic] over last year. The total two-wheeler ICE sales grew by 12% compared to Q4 of last year, as against the industry growth of 4%. EV two-wheeler sales increased by 54%. We achieved 76,000 units as against last year’s 49,000 units of Q4 to Q4 this year. Three-wheelers grew by 21% this quarter with 37,000 units as against last year’s 30,000 units.
This quarter, the company’s operating revenue grew by 17%, which is at INR9,550 crores as against INR8,169 crores during last year’s fourth quarter. On profits, company posted operating EBITDA of INR1,333 crores during this quarter as against INR926 crores in the fourth quarter of last year. We have recognized the production-linked incentives, PLIs, pertaining to the full year based on the progress made in line with the MHI’s SOP and PLI. The company’s operating EBITDA margin is at 14% in Q4. Please remember, this 14% includes the PLI benefit for all the previous quarters. If you really look at only for this quarter, the Q4 EBITDA margin will be at 12.5% as against last year Q4 of 11.3%. We posted a PBT of INR1,112 crores during this quarter as against last year’s INR672 crores. Profit after tax for the quarter is INR852 crores as against INR485 crores during the fourth quarter of last year.
Coming to TVS Credit, TVS Credit has done extremely well. We have added over 40 lakh new customers. Cumulatively, TVS Credit has served 1.9 crore customers till date. TVS book size is INR26,647 crores. There is a good growth over last year. PBT for the year grew by 39% and INR1,027 crores as against last year’s INR763 crores. For the quarter, PBT grew by 53% at INR302 crores as against last year’s INR197 crores. Okay? As I highlighted last-time, despite slow credit demand, TVS Credit maintained stable disbursements, supported by increased market penetration. We will continue to — TVS Credit will continue to focus on steady growth by increasing market penetration and share, expanding product offerings and distribution, driving digital transformation and enhancing customer experience and operational efficiency.
Now coming to ’25-’26, the GDP projected is estimated to grow around 6.5% over last year. This is primarily driven by the increase in consumption and improvement in agricultural sector. In FY25, we have seen overall retail grew by about 7%, even though Q4 was flat. A reduction in the benchmark repo rate of 50 basis points in the last three months. This definitely translates into lower EMIs for consumers which is going to help enhancing the affordability of two-wheelers across the board. Another major impetus which is in the union budget is income tax rebate under the new tax regime which is hiked from 7 lakhs to 12 lakhs. There is an additional savings is also likely to support the consumer sentiments.
Consistent infrastructure improvement by government, that is also going to vitalize the economy and improve the quality of life in the midterm and the long term. We are expecting a normal monsoon which is going to also improve the rural sentiment and economy. We are expecting a positive sentiment with uptake in the replacement cycle this year. Overall growth momentum in the domestic market we are expecting is likely to be like last year. The first quarter could be moderate. I think all of us should remember that last April, there was a base effect benefit, okay, that May and June will be good, where our marriage season has started off well and May and June this year there are many marriage days.
On EV, EV industry retail on VAHAN reached 1.2 million units in financial year ’25. This is from 0.5 million to 1.25 million — 1.2 million, a 31% growth. Average penetration for EV two-wheelers for the year stood at 6.8%. The continued focus and the support of EV adoption extended by the central government in the form of PME drive, PLIs are making EVs more affordable for consumers. As all of you know, TVS iQube is established as a very strong brand in the EV segment with its technology and its features and best-in-class quality. During the year, company introduced a new variant at three battery options; 2.2 kilowatts, 3.4 kilowatts and 5.1. We are getting very good response. We are also expanding the network. Some of our EV products are in the final stages. You will see these products in the coming quarters.
Our recently launched EV three-wheeler TVS King Max which comes with best-in-class features including the Bluetooth connectivity through TVS Smart Connect, combined with innovative technology, eco-friendly solution, it is definitely going to cater to growing demand for sustainable urban mobility. So far, we are getting very good response and we will be scaling up in the coming quarters.
The three-wheeler EV industry penetration has grown quickly. In Q4, it is around 26%, if I’m talking about the sales side [Phonetic]. Like I said in the last meeting, like two-wheeler e-mobility with TVS King EV Max, we will aim to become a prominent player in this category.
On international business, financial year ’25 exports from India stood at 4.2 million units at a growth rate of 22.1%. H1 saw a healthy growth rate of 16.5%. H2 reported a faster growth rate of 30%. We have done well and we will continue to keep up the momentum. Exports to LatAm region experienced higher growth with strong demand in many markets starting from Mexico, Colombia, Guatemala, while there were some challenges in Middle East, okay? Now company’s exports reached 1.25 million as against 1.01 million with a growth rate of 24.5%, increase driven by strong growth in Asia. And this year we are happy that Sri Lanka has opened up, while Bangladesh has got some challenges and very sure going forward, it will settle down. LatAm has done well last year.
The African market, we observed a mixed momentum where growth is — growth in the key countries decelerated on account of economic slowdown, driven by higher inflation and currency devaluation. But we are quite optimistic because many of these African markets it has reached almost the bottom and there is only upward revisions possible this year.
We are optimistic about the industry’s recovery and expect positive trends and we will grow ahead of the industry in the EV market. And as you know, company has been continuously improving its EBITDA margin year-over-year almost a decade now, wherein 2014-’15, company’s EBITDA was at 6% and now, this quarter, with CR we are closing with 12.3%, okay? We are confident that the company will continue to leverage its top line growth, better product mix, sustained cost-reduction initiatives to improve profitability going forward. With a strong range of brands, company is confident of growing ahead of the industry, both in domestic, international markets across ICE and EV. Thank you.
Operator
So do we begin the question-and-answer session?
K.N. Radhakrishnan — Chief Executive Officer
Yes, please.
Questions and Answers:
Operator
[Operator Instructions] We have the first question from the line of Binay from Morgan Stanley. Please go ahead.
Binay Singh
Hi, team. Thanks for the opportunity. My first question is what exactly is the PLI benefit that we have in the fourth quarter margin? Like we understand 12.5% will include PLI for that quarter. So how much is that?
K.N. Radhakrishnan
0.5%.
Binay Singh
Okay. So it means that even adjusted for that, you’ve seen some bit of a margin improvement. And sir, secondly, like one sort of a more longer-term question. One change that we’ve seen in last year is that the scooter growth, including electric vehicle has almost been twice of motorcycle growth at the industry level. How do you see this trend in your view? What is driving that and do you see this continuing? Happy to hear your thoughts. That’s it. Thanks.
K.N. Radhakrishnan
Brilliant question. I think you know every time when I look at Twitter I used to say that with EV coming in, [Indecipherable] scooter in the space, the category share will go up. I think that is exactly what is happening. If you look at the scooter category share, it’s almost now somewhere around 38%, okay? It is likely to go up further because scooter has got its own convenience, its own benefit. And with the EV scooters, almost 1.2 million, whatever we have seen, I think we are expecting scooters will definitely grow.
And another important thing according to me is, even in scooter there are different, different brands, different, different sections. This is also going to propel growth faster than the other sectors. When you look at economy motorcycle or CBD [Phonetic] motorcycle, or a premium motorcycle.
Binay Singh
Right. So sir, in that sense, when you look at a market like Indonesia, we have a very wide range of scooter models, right, wide range of CCE, vehicle weight and all. So when you plan your product in the future, you are also sort of thinking in that direction.
K.N. Radhakrishnan
See, we have to always look at how the customers are preferring, what customer segments are there. For example, we have Zest. This is like an entry-level scooter. And we have Jupiter 110. This is more of like the integrated kind of vehicle. Then we have 125 CC in that. Then you have Ntorq, which is completely different. It is for more young, more powerful. So if I say like middle-income group, more of salaried class, it may be typical 110 and 125 depending upon the preference of the customers. But if you look at young who wants little bit peppy ride, faster ride, little bit better pickup, sleeker, they go for something like Ntorq.
So this kind of segmentation, I always say that you look at our motorcycle segment, there are different, different products, different, different products for different, different customer usage. It is now almost 38%, 39%, and according to me it will grow further, scooter category will grow further. More and more segments will come. And we have to come up with products which will play in these segments and we will do that.
Binay Singh
Right. Great. Thanks, sir. I’ll come back in the queue. Thank you. We have the next question from the line of Chandramouli M from Goldman Sachs. Please go ahead.
Chandramouli Muthiah
Hi, good evening and thank you for taking my questions. My first question is just a follow-up on the PLI scheme incentives that you have booked this quarter. So just want to understand what percentage of our EV scooter portfolio are we currently accruing these incentives on. Is it on the entire portfolio? You mentioned there’s two, three and five kilowatt-hour. So just want to understand which products there have qualified. And also if you could just share what the split within electric two-wheelers portfolio is percentage-wise between the two, three and five kilowatt hours.
K.N. Radhakrishnan
See, I think we have to look at the total benefits what the company has accrued. We should not look at which segment is giving how much because we are a completely focused company on customer and customer segments. Just now I answered to the other colleague [Phonetic] that there are customers who want 5.2 kilowatt. There are customers who want 3.4 kilowatts, there are customers who want 3.2 kilowatt. So we have to look at whatever is the requirement and government has been very forward, looking at the PLI. So we look at PLI in totality. We don’t look at — it is 0.5% on the total turnover is a brilliant PLI incentive according to me.
Chandramouli Muthiah
Got it. Got it. That’s helpful. My second question is just around product launches. So I think, historically, we have target to do one product launch per quarter. And you mentioned in your opening remarks that many of your EVs are in the final stages of development. So just going forward, the next sort of 12 to 18 months, if you could give us some clarity on is sort of similar run rate of one product launch per quarter and just heading into this whole stimulus period, lower interest rates, a more favorable income tax rates for customers, what is the sort of cadence to expect in terms of product launches as you plan for the next couple of years?
K.N. Radhakrishnan
See, we have a very strong R&D and we will continue to invest in looking at the segments and coming up with products, both in ICE and EV. And products are getting ready. But what is equally more important is timing of these product launches. We launched the Jupiter 110. All of you know that. And it has been very well-accepted and thanks to all the customers in India. Now we are looking at how do we leverage it fully, okay? Same way iQube, we are now present in about 950 dealerships. Still we can expand that.
So we want to be very systematic. We don’t want to — systematically expand in every market and it is doing extremely well. Okay. We are a very prominent player in EV. So we look at the timing. Even though the products are ready, we will make sure that the product gets what it deserves, because we’ll be investing quite a lot of investments in people as well as money. So every product should get the best return for the company. So while sometimes the products are ready, sometimes we take a very strategic call of timing it into the market.
Chandramouli Muthiah
Got it. That’s helpful. And just my last question is around your view of two-wheeler industry growth in India next year. So you mentioned that you think that you will have different bases for different quarters. But just want to understand, overall, how you’re thinking about two-wheeler industry volume growth for FY ’26? And also just if you could share the export and the spares revenue for the quarter?
K.N. Radhakrishnan
Sure. See, if I look at the industry growth, this year April so far is flattish, okay, but if you compare last year base and year before last year, year before [Phonetic] last was bad, last year was much better and we are building on the last year very good numbers. That’s number one. And when I look at this year May and June, likely to be, according to the marriage season it’s going to be much better because number of marriage days is much, much higher this year. This is number one. Number two, monsoon is likely to be normal. Number three, a lot of investment has gone in supporting the infrastructure, roads, okay. And currently, especially in the last year of Q4, we are seeing a little bit of slowness in the two-wheeler industry, primarily, according to me, because last year during the Diwali season, the growth was excellent and rural went up against urban for the first time. And the retail financing companies possibly would have taken advantage of that. And there was a little bit of a restriction in terms of retail finance in the last quarter. I’m very sure, the reflections are getting much more refined this year. So a combination of the base effect, plus May and June, you will be seeing more marriage days. And number three, overall, the investment in the economy. I think I said very clearly, while the first quarter may be a moderate growth, but year as a whole we are looking at like last year. This is on the domestic side.
On the international side, we expect a healthy growth, primarily because Africa, which was very low last year, okay, it has reached really the bottom. So you will see upward improvements this year. Of course, there are challenges in terms of how the geopolitical things are taking shape. But the need for two-wheeler is still there. So definitely, I am positive, okay? And always we have to be having that caution because there are many things which we have to be closely monitoring, but I’m positive. TVS model is positive. And with our product range, we will definitely grow ahead of the industry. And you ask two things, right, spare part, just a minute — give me a minute. Spare part for the quarter is about INR907 crores this quarter, okay? And you asked for international business, correct? International business, revenue for the quarter four, it was INR2,391 crores.
Chandramouli Muthiah
Got it. That’s very helpful. Thank you very much and all the best.
K.N. Radhakrishnan
Thank you. Thank you.
Operator
Thank you. We have the next question from the line of Pramod Kumar from UBS. Please go ahead.
Pramod Kumar
Yeah. Thanks a lot for the opportunity, sir. Sir, my first question is on the PLI only. Before I ask the question, just wanted the number on revenue side for fourth quarter, excluding the PLI incentive for the previous quarter, sir. You shared the margin at 12.5% for the quarter, recurring margin. So if you can just share what is the recurring revenue run rate for 4Q without the PLI incentive for the previous quarter, sir.
K.N. Radhakrishnan
You want to know the PLI number, right? It is 0.5%. See, 0.5% of the revenue in the quarter is this one. So you can deduct it from the overall revenue, you’ll get without that. That’s the number one.
Pramod Kumar
No, no. I’m looking for the previous quarter PLI incentive, sir. So okay, let me put it this way. Is the revenue for this quarter including PLI is INR9,412 crores, is that understanding right? Or you can give me the response to this during the course of the call if you want to have a look at the numbers, that’s okay. Is it fine, sir? Can I move to the question on PLI?
K.N. Radhakrishnan
It is about INR9,340 crores, somewhere around that.
Pramod Kumar
[Speech Overlap] INR9,342 crores. Okay, INR9,342 crores. Sir, my question is on the incentive side because there is a domestic value-add hurdle which you need to meet and then the incentives need to be cleared [Speech Overlap] Sorry.
K.N. Radhakrishnan
You should understand that we have put all the PLI only accounted in this Q4. [Speech Overlap] Only related to this quarter you should consider. So Q4 underlying EBITDA is 12.5%.
Pramod Kumar
Yeah. Perfect, sir. Perfect. I understand that. My question is that do we see more headroom for PLI incentives improving as we improve our domestic value-added quotient of the products, do more localization, ramp-up the scale and sourcing? So how should one look at PLI incentives from the 4Q levels when we look at the next two years, sir?
K.N. Radhakrishnan
See, we have to look at in three things. One, I continue to believe in focusing on the customer.
Pramod Kumar
Yes.
K.N. Radhakrishnan
Thanks to the government, they are giving this PLI benefit. And as we grow with more products added into the new product launches, EV will grow and the revenue will grow, you will get more PLI benefits. Equally, we have launched the three-wheeler EV, very well-accepted. Now PLI benefit on that will also come. So our job is to look at various customer segments and delighting the customer. This is number one. Number two, as we put the products and as we grow the top line. Three-wheeler [Speech Overlap] recently, PLI benefits will come. So going forward, continuously quarter after quarter, you will see this benefit flowing through to [Technical Issues].
Pramod Kumar
Okay. So in a nutshell, you expect the PLI incentives to continue to keep getting better from here on? Is that understanding right, sir?
K.N. Radhakrishnan
Top line will grow. Every new product we will launch, we will get the PLI benefit. Three-wheelers we have already started — we have applied for everything and we are likely to get the PLI also there. So according to me, the PLI benefits will continue.
Pramod Kumar
Okay. Now, that’s good to hear, sir. On the e-three-wheeler side, because I just looked at the numbers, you you’re actually practically closing on Piaggio on the e-three-wheeler volumes pan India. So if you can just help us understand where are we on the network side, because Piaggio, Mahindra, Bajaj have been in this market for a while and you have entered this market only recently. So if you can just help us understand the journey so far, how has been the customer acceptance, how many markets you’re present and in those addressable markets where you’re present, how has been the market share ramp-up because you’re kind of nudging the number — getting to a number three position now? And how big the opportunity could be, say, one or two years down the line? And also what are the products, launches or action in the e-three-wheeler space, sir?
K.N. Radhakrishnan
First, let me give you three things. One, the e-three-wheeler, whatever we have launched, we are extremely happy, the response has been very positive from the customer side. This is number one. And it has got so much of attractive quality and the features and customers are really, really loving it. Number two, as I highlighted, this e-three-wheeler in the L5 category is growing at a very, very good rate, okay? Now practically, the penetration levels are close to 28% and it is likely to grow maybe 35%, some very big numbers you can say. That is the speed at which it is growing and we will be a prominent player. Our focus is to become a very prominent player. Like you highlighted, we have only launched in few markets in North. We have just put some markets in East and there is a huge opportunity all India. And we definitely respect all the three competitors whomever you have highlighted. They are a great company. I never compare my competitor. I look at always the customer.
Pramod Kumar
Sir, if you can quantify network, how much of the addressable market you’ve covered, how much is the potential? Just like you said, iQube is there in all the 900 outlets. You got a network footprint of 3,000 — 4,000-plus. Yeah.
K.N. Radhakrishnan
You’ll have to give me some time because I have not really looked at it, but I can tell you few markets in North only we have launched and very few markets in East we have launched, [Speech Overlap]
Pramod Kumar
Sir, last question to Desikan sir. Employee costs and other expenses have grown by 23% and 26% in FY25. Our revenue growth is 14%. So there’s been absolutely no operating leverage, there’s been operating deleverage because of the accelerated investments what you’re doing on R&D and technology and all that. So if you can just help us understand how do you see this cadence in FY ’26. Will there be because — and mind you, this is not only in FY25, that’s been the case for the last three, four years now that there has been no operating leverage. Everything — the margin execution has happened from portfolio level and gross margin improvement and the kind of success you have found with the products. So can we expect FY ’26 you will see some operating leverage coming back to the business because of all the investments which you have already done?
K.N. Radhakrishnan
I know you want Desikan to answer, but before Desikan answers, Desikan with your permission I want to answer him. The most important thing according to me, overall as a company, our EBITDA has been growing extremely well. I’m very sure all of you [Speech Overlap] okay? And please understand, I highlighted that we are investing in the right areas of software, digital and analytics because these are the areas which is likely to become bigger and bigger going forward. And we have strengthened our R&D and new product development significantly higher. All this talks costs money, okay? And I’m very sure these are all investments for growing the top line ahead of the industry going forward. Okay? Now I don’t want to give any prognosis for the next year because we are not a company — we will look at investing in the right areas, whether it is employees.
Operator
Sorry to interrupt, Mr. Pramod Kumar, request you to kindly mute your line. There’s a lot of disturbance.
Pramod Kumar
That’s not my line. That’s for sure. I’m in room alone, basically. So there’s no one here. Sorry. I’ll mute it [Speech Overlap].
K.N. Radhakrishnan
Okay. Now I leave to [Speech Overlap]
Pramod Kumar
Sorry, my line was muted by the way. So just…
K.N. Radhakrishnan
I think there is some problem with Desikan’s line [Speech Overlap] there is some challenge with Desikan’s line. So [Speech Overlap]
Pramod Kumar
So I think not a problem, sir, you can let Desikan sir answer this question. I’ll drop out of the queue just in case if it helps. So I look forward to the response on that. Thank you, sir, and wish you all the best. Thank you.
K.N. Radhakrishnan
Desikan, you can answer. I think there’s some problem with his line. He is trying to answer, but he is not able to — we are not able to hear that.
Pramod Kumar
No problem, sir. He can answer during the course of the call. Thanks a lot, sir.
Operator
Thank you. [Operator Instructions] We have the next question from the line of Gunjan from Bank of America. Please go ahead.
Gunjan Prithyani
Yeah, hi. Thanks for taking my question. Just a quick clarification on your prior comments. Like can you give the EV revenues for the quarter and the year, fiscal ’25? And also you mentioned somewhere that financing probably has tightened a bit. If you can like sort of share what does it mean for our portfolio? Have we seen some change in — or how much is the portfolio which is financed in quarter four? Has there been any let down on that?
K.N. Radhakrishnan
See, I said during the Diwali season, this is the first year rural came back in a big way or one of the [Technical Issues]. So overall, what has happened is a little bit of good financing has happened, okay? And whenever there is a good financing, sometimes what happens is you have to look at the collection efficiency. And many of the retail financing companies look at. However, in the case of TVS, we have been always prudent, okay. For example, whether it is our GNPA or NNPA, okay, they are extremely good, because we are always prudent in terms of looking at what is the right financing and we look at the quality customers. Okay. So that way TVS Credit has done extremely well.
Gunjan Prithyani
And, sir, EV revenues, if you can share, what was that?
K.N. Radhakrishnan
I will tell you, just give me a minute. EV revenues for the year is about INR3,364 crores. This is for the year, okay?
Gunjan Prithyani
And the quarter?
K.N. Radhakrishnan
Just go for the quarter. Quarter is about INR889 crores.
Gunjan Prithyani
Okay. And sir, just second question I have is on a lot of items that you’ve mentioned in terms of dividend income from subsidiary, mark-to-market, can you give us a little bit color on what is — where this dividend income is from? Where are we seeing this fair valuation losses? And again, the investments that we’ve made in this quarter, around INR600 crores, where has that gone? Some color on all the footnotes regarding the subsidiaries.
K.N. Radhakrishnan
There are too many questions in this one question. So let me try to recollect one by one and try to answer you. Other income, we had dividend income from SACL. And we had a notional loss on the previous investments made in supply chain. Okay. So these are the predominant ones. And your next question was on the investment during this quarter, correct?
Gunjan Prithyani
Yes.
K.N. Radhakrishnan
Just give me a minute. Investments are primarily, as we highlighted earlier, one is Norton. Then small investments in some of the — investments related to [Indecipherable] TVS Digital, okay? And I think these are the most important ones.
Gunjan Prithyani
You said INR2,000 crore-odd. Is that going to be the basis investments in fiscal ’26 as well or any change there?
K.N. Radhakrishnan
For this financial year also, please understand, like I said, Norton will continue because Norton products will be available end of the financial year, okay. We are looking at products getting ready to launch into the market. So that investment will continue. Some investments into the TVS Credit will be there this year also because it is doing extremely well. And there will be some investments related to the SEMG, that is the electric cycles. So these are the broad investments we are looking at this year. So the number will be around this year — whatever we have done this year.
Gunjan Prithyani
Okay, got it. Thank you, sir. I’ll join back the queue.
Operator
[Operator Instructions] We have the next question from the line of Vipul from HSBC. Please go ahead.
Vipul Agrawal
Hi, sir. Thank you. Thank you for taking my question. This is about the CNG scooters. Please correct me if I’m wrong there. Getting right torque at incremental rate is a challenge what we are seeing in the CNG two-wheelers. So typically motorcycles are used to carry more weight than scooters. So will it be fair to assume that CNG tech is more suitable for scooters than motorcycles?
K.N. Radhakrishnan
I can’t say like that because we have to look at the customer usage again — customer usage. So — because customers are agnostic about the technology, okay? CNG is a good technology. So we have to look at in totality how the customer preferences are moving. Sometimes you have to also little bit time it. So I don’t want to come and conclude it is better, but you would have seen our scooter with CNG. Appropriate time we will look at it and see — whenever the market is ready, we will be ready for — because we have the in terms of product, technology and delivery capability and excellent network.
Vipul Agrawal
Sir, actually I’m trying to understand like, for example, in rural India, it is typically two to three people sit on a motorcycle. So the weight becomes almost 200 kgs or 250 kgs per vehicle. So I think over there, the incremental torque to carry that weight reduces significantly in a CNG motorcycle rather than a petrol motorcycle. And typically in a scooter, normally one or two people will sit at max. So I’m trying to understand that if CNG is a case more for like one or two-person driving the vehicle or can it carry like three people weight as well, like it’s a typical requirement of a rural market?
K.N. Radhakrishnan
See, rural, urban, in my opinion, the usage I have seen even in scooters three people and four people sitting, okay. So that is unique to our country because they use it. But what is most important, my understanding is that motorcycles, generally people use more kilometers per day, okay. We have seen motorcycles, average usage maybe about 40 kilometers, okay, whereas in a scooter it is about 20 to 25, okay? And urban-rural split when you go through that again, the usage cycles are little different. So — but usage difference irrespective of the fuel, I think we have to closely look at it. I think there may be many factors. One is the usage, another one is number of CNG, today how many real outlets are there, how much time people have to stand in the queue to get the CNG, because customers are very sensitive. Practically, I would say that if somebody has to wait for longer time, they don’t have the patience, because always time is very, very important for people.
So we have to look at in totality. But according to me, CNG is a very good option. When and how and which models and what we need to look at it, I think this is a very important work which we are studying very closely.
Vipul Agrawal
Thanks. And just one quick question if I can take on exports. You touched upon Africa on your initial comments. Your exposure — just to a couple of countries, like your exposure to Guinea, Tanzania and Congo was relatively higher in your portfolio. So if you can talk a bit about like economic growth drivers in those countries and what are the key models being sold over, like it’s like mid-size, mid-variants or the small — sorry, cheap variants being sold over there.
K.N. Radhakrishnan
See, it is primarily HLX series, okay? HLX series, HLX 110 is there and 125 is there, now of course the 150 also. I think these are all taxi market, okay? Of course, these markets we have also started selling some of the products from Indonesia. The response has been very good. So these markets are doing very well, the entire markets whatever you highlighted. And the infrastructure development is also happening. The most important thing is some taxi at some point of time you will start commuting customers to come in. This is — you have to be very [Speech Overlap] yeah, tell me.
Vipul Agrawal
No, sir, actually, I was asking more of an economic growth drivers for these, like for Nigeria, it’s crude. So are any different economic drivers — growth drivers for these countries or how does it work like [Speech Overlap]
K.N. Radhakrishnan
See, country-by-country, there are certain common economic drivers, there are different economic drivers. And we have a very strong team which drives country by country, whatever the economic drivers — if you ask me, straightaway I may not be able to share with you because it is a — it will take more time to share with you. Country-by-country, there are economic factors. We have to closely look at it. And there are factors which also influence the local inflation. There are factors also decide on the currency — currency fluctuation, currency rate, because all these factors are very, very critical from the customer point of view on the on-the-road price.
And there is also another factor, because in these markets, the financing, who is able to give the financing, who is not able to give the financing, that are organized, that are dealer driven. So multiple factors are there. And your distributor strength and your dealer strength, network strength. And another important point is, we understand in a taxi market, service is very, very important because they don’t want any unproductive hours. So if it’s somebody able to do extremely good service, there are markets which the two-wheelers run for almost 200 kilometers a day. Okay? So multiple factors are there.
Vipul Agrawal
Understood, sir. Thanks a lot.
Operator
Thank you. We have the next question from the line of Sonal Gupta from HSBC. Please go ahead.
Sonal Gupta
Hi, good evening, sir, and thanks for taking my question. Just on the — I mean, like, just going back to capex and investment in subsidiaries. So we’ve seen a big jump in capex. I’m just talking standalone numbers. So INR1,800 crores of capex versus, say, roughly INR1,100 crores last year. So could you sort of give us some more detail into where is this investment spend going? Is there some capacity expansion as well? And how do you expect this for next year?
K.N. Radhakrishnan
See, the capex is all — most of the capex, I will say, it is all related to new product and technology-related, okay? And there are — of course, for example, Jupiter 110, there are investments related to capacity also, okay, because this product originally we looked at 50,000, now we are doing almost 65,000 because these are — when the market pull is there, that is the time we have to look at in terms of investing behind the manufacturing capacity, supplier capacity.
Second, please remember this also includes all the two-wheeler and three-wheeler EVs, okay? And these are definitely going to help the company in the future. So it is new product development, technology and some areas for capacity increase. 4.7 million we have done last year. We are expecting much better growth this year than the industry and some are related to existing products doing better, some are related to new product launches.
Sonal Gupta
Right, because in the past we have said that we will look to internalize or localize — I mean, internalize some of the EV components. So is there a lot of investment related to that in this number?
K.N. Radhakrishnan
No, we look at — like I said last time, there are many things we make it in-house, okay. And we also buy. So it is a make and buy strategy we look at, okay, primarily because of the technology capability, we want also make. And certain areas, for example, the three-wheeler EV what we have launched, the motor is from our company. It is designed, developed and inside manufactured. So it is a very prudent strategy of make and buy.
Sonal Gupta
Right, because I mean the way to look at it, if I look at combined, right, like because a lot of our investments which is going into subsidiaries is also — I mean, other than Norton is really — and TVS Credit is really again technology for the company itself, right, on an overall basis. So I mean, like last year, we roughly spent about INR2,450 crores if I include subsidiary investments, and that is including whatever is put into TVS Credit and Norton, and that number has gone to almost INR4,000 crores this year. So there is a substantial jump. So I’m just trying to understand, right, like that the pace at which we are investing and how are we — I mean it seems a very large number. Could you sort of highlight how much is TVS Credit this year?
K.N. Radhakrishnan
Yes. Let us go one by one. You have seen TVS Credit numbers, and predominant investments are gone behind TVS Credit, and the book size is almost INR27,000 crores now. And it’s extremely profitable also and there is huge room for growing that business. This is number one. Number two, Norton, I told you, whatever investments, we have invested all behind the products and products are likely to be seen in the market in Q4 of this year, okay, that is financial year ’26, this year, okay? Then there are investments related to lot of technology, new technology, including digital, which is even though we are focusing mainly on the EV side, but it is going to be very useful for some of the products in the ICE side.
So these technologies, these capabilities, we are investing behind for the total two-wheeler, three-wheeler business, okay. And we have also — like I said last time, we have also started and entered in the Italy market. There is a huge opportunity to look at many of the European markets. So company is looking at investment behind products for certain — all the developing markets, including now we have started looking at the developed markets. So combination of new products, technology and certain technologies in digital and analytics which are going to be across all products for all regions.
Sonal Gupta
Okay. No, basically, where I’m coming from is that your EBITDA is effectively — if I take the fact that tax payment as well, right, like you’re not generating any free cash flow, so — I mean after your investments in subsidiaries and capex. So that’s where I’m coming from. But anyways, we’ll take it more offline. Thank you, sir.
K.N. Radhakrishnan
See, this company, we invested in TVS Credit. We invested in Indonesia. We invested in many of the new technologies, including EV and [Indecipherable] in three-wheelers. Because we invested, you have seen the kind of revenues whatever you have seen. And because of that, overall EBITDA has grown from 6% about a few years back, now we are at 12.5% this quarter. So the objective is to look at investing in the right technologies, right areas, right new products, grow the top line ahead of the industry, okay? And free cash flow will automatically come. If you grow your top line and invest in the right technologies — understand each of the technologies requires really one or two years or sometimes even three years to fructify into top line.
Sonal Gupta
Sure, sir. No, no, that point is well taken. But if you could just later on clarify how much has gone into TVS Credit and Norton, that will be helpful.
K.N. Radhakrishnan
TVS Credit, significant investment has been behind TVS Credit. And it’s doing extremely well. And Norton, the average [Technical Issues] we saw always tell you, about INR500 crores.
Sonal Gupta
That is an annual number?
K.N. Radhakrishnan
Yeah, yeah.
Sonal Gupta
Yeah. Great, sir. Thank you so much.
K.N. Radhakrishnan
Thank you.
Operator
We have the next question from the line of A. Purani from JPMorgan. Please go ahead.
Amyn Pirani
Yes. Hi, thanks for the opportunity. Sir, my first question is on the motorcycles. This year, we’ve seen some moderation in the growth of the Raider and we had a refresh. So any plans of any product in the 125 cc or any plans on the Raider, or any other launch that we should look forward to for motorcycles as a whole?
K.N. Radhakrishnan
See, Raider has done extremely well, overall, if you look at it from the day it was launched, okay? And I’m pretty confident this is going to be an all-India market, not only all-India market, it’s going to be a product for the local market. Sometimes you have to wait — a little bit of — you need to keep the patience because when we started Apache, for example, it took some time and Apache is a great brand now. So in Raider, I’m pretty confident that this will — this year, you will see a significant growth in Raider, okay? When we started the Jupiter 110, it was slow, steady. Now Jupiter 110, plus 125 is doing extremely well. So many a times you have to be a little bit cautious and you have to be investing behind the consistent product, as well as brand, okay. And it is a prudent decision we have to look at. And I’m pretty confident that the customers who buy Raider are extremely happy in the 125 cc. And the good news is while the economy — the overall motorcycles if I look at, economy is not so great, economy has been not growing, due to many reasons we know that, okay, because the buying power in that category at the entry-level is a little difficult. It’s not fully gone, okay?
But the executive category is the category which is growing very well. And Raider in that category, in the last couple of years, what position it has taken is excellent. And I’m pretty confident that we will see a significant growth this year. Of course, we have done certain upgrades, certain technology products. iQube [Phonetic] we have launched this quarter, all are having very good pull in the market.
Amyn Pirani
Understood, sir. And sir, just on the investments, one clarification. This quarter also, I think, there is some investment in TVS supply chain. So I mean, we understand the investment in the subsidiaries and all those things. But in TVS supply chain, just want to understand the rationale for this investment because we’ve already had some investments and I think we are doing further investment in that as well.
K.N. Radhakrishnan
I look at in totality. What is most important, we look at it in totality and then we go behind certain investments which are for medium-term, short-term, long-term.
Amyn Pirani
Okay. But I’m guessing that supply chain is more of a financial investment, right, because I mean, unlike your other subsidiaries, here you only have a small stake.
K.N. Radhakrishnan
Yes, yes. Correct.
Amyn Pirani
Understood. Thank you. I’ll come back in the queue.
Operator
Thank you. We have the next question from the line of Kumar Rakesh from BNP Paribas. Please go ahead.
Kumar Rakesh
Hi, good evening. Thank you for taking my question. My question was around TVS Credit. So maybe you spoke about the PBT growth and the general trend. Can you speak about the credit quality, how that has moved sequentially in terms of NPA, GNPA, credit cost, any of that that you can share on that.
K.N. Radhakrishnan
GNPA, this quarter is around — year as a whole it’s about 2.9%. And quarter-after-quarter even the March quarter is excellent, actually, 2.8%. Okay. Desikan, are you there in the line? Are you able to connect the line, Desikan?
K. Gopala Desikan
Yes, I am there but not able clearly hear. I mean, am I audible now?
K.N. Radhakrishnan
Are you able to hear, Desikan?
K. Gopala Desikan
I am able to hear you.
Kumar Rakesh
Faintly yes, I think.
K.N. Radhakrishnan
Yes. They are able to hear. Then you can continue, Desikan. We’ll increase the volume a little bit.
K. Gopala Desikan
You have very rightly said, the performance in the book is improving. The quality of the book is improving. That’s the reason — one of the reasons why — otherwise we could have even grown INR30,000 crores. We were very cautious in the lending, the disbursal. And the GNPA, as you very rightly said, is 2.9%. And the quality of the book is very good today. And our collections are — that our collection costs have gone up because we wanted to collect everybody. And therefore, the collections are quite healthy around — close to INR7,000 crores we have collected in Q4 as against the comparable quarter of around INR5,700 crores. So this is what it is.
K.N. Radhakrishnan
What we are always looking at TVS Credit services is quality growth — quality profitable growth, let me put it that way.
Kumar Rakesh
Okay. Thanks for that. And on the subsidiary losses, so what drove in this quarter and how do you see that panning out in FY ’26, now that you spoke about that Norton should have a product by the end of this year. So how would you be expecting the subsidiaries as a whole to perform in FY ’26? Thanks.
K.N. Radhakrishnan
It will be better, definitely, because Norton is all about product. When we bought Norton, nothing was there practically, because only the brand which we bought and it took time to invest and create this product. And we are really looking forward to this Q4 this financial year, and I’m pretty confident that the products will do well.
Second, this year, the CNG, there are many initiatives we have taken, but unfortunately, the European markets are going through very, very tough times. So sometimes we have to be patient. But what is most important is we are taking many actions in the e-business, e-cycle business, which is helping us. So I’m more positive about e-business this year, okay? And other investments TVS Credit you have already seen. These are predominant businesses. And all the remaining investments are behind technologies, which are used for our two-wheeler EV, two-wheeler ICE and three-wheeler. So this year, definitely, you will start seeing the returns coming in, okay? Maybe it may take one or two more years to see really good benefits coming.
Kumar Rakesh
Great. Just a clarification. We have not taken any write-off in any of the European investments that we have made or do not see that to be happening in this year, right?
K.N. Radhakrishnan
Desikan?
K. Gopala Desikan
No, no, we don’t — we have not provided for. We have no need to provide for. Again, you spoke about losses in the subsidiaries. Norton is an investment. What is happening there is only the development-related expenditure being incurred there. And therefore, there is no reason for any impairment provisions required and we are confident about all our investments.
Kumar Rakesh
Great. Thanks a lot.
K.N. Radhakrishnan
Sure. Thank you. Can we take the last question, please?
Operator
Sure, sir. We have the question — next from the line of Mr. Pramod Amthe from InCred Equities. Please go ahead.
Pramod Amthe
Yeah, thanks for taking my question. Sir, the first question is with regard to the industry subsegment. Considering that you are the largest listed player in this sector [Phonetic], can you give some clarity in terms of what’s the rural versus urban mix now? How it has grown in last year, especially considering that rural has come back, but scooters have outperformed drastically versus typically motorcycles are understood to be more a rural product.
K.N. Radhakrishnan
See, rural did well last year Q2 and Q3, okay. Q4, bit of a blip in rural. Even this month, when I look at it, rural is little bit lower than urban, okay? So that is — and fortunately, we have VAHAN. So you can give a very quantitative measure, and all of you can see that also. However, I am of the view that May and June, we have to closely look at it. Marriages are — the number of marriage days are more this year and monsoon expectations are normal. These are positive sentiments. And agriculture is doing well. So I’m of the view that this year you will see rural holding up. We saw in Q2 and Q3 last year rural coming back in a big way. I am expecting rural should respond more positively and retail finance will definitely come back, definitely in this quarter and next quarter. And this year, as you know, the predominant season is in September and October. So it is between Puja and Diwali in September and October.
So according to me, rural should start improving going forward because last year we saw only two quarters and then it’s little bit subdued. It should come back. This is on the rural outlook.
Pramod Amthe
And what’s the scooter mix for rural and urban, sir, now for the industry?
K.N. Radhakrishnan
Rural, I don’t have exact number, because VAHAN doesn’t give that. And if I make a judgment that may not be fair. But urban is more on the scooter, definitely, but the rural is picking up. The rural is definitely picking up.
Pramod Amthe
Okay. And second one is with regard to PLI. When you look at your localization, that was the entire initiative to incentivize the localization through PLI. So in your journey, where are you in terms of localization for EVs as a proportion of import versus the local produced as a percentage of value, and what is your target for next year and later on? And what are the products or sub-segments or the parts which you are looking at to drive this localization?
K.N. Radhakrishnan
See, localization has been the strength of our company because we have worked on always BVA [Phonetic] more than 50%. And we will continue to work on this because this is something — and you know that cell at this point of time is imported and there are cells which are going to be made in India and we are also partnering with some of them. So it is going to be a journey, okay, the entire EV is going to be a journey. And we are very positive that the volumes will grow and we are doing the right make and buy decision. That’s why I used the word make and buy, make and buy decision. So it’s a continuous journey.
Pramod Amthe
Sure. Thanks and all the best.
K.N. Radhakrishnan
Thank you. Thank you, everyone. Thank you everyone for joining. So if I can summarize, we are extremely happy that we posted the highest-ever revenue of INR36,251 crores and a PBT of INR3,629 crores in the financial year just closed. And with our unwavering focus on consumer quality and customer delight, we are confident of continuing to grow ahead of the industry. Like I said, we will continue to invest in people, technology, to develop more new products, develop the right technologies for not only India, developing markets and developed markets. With the kind of product range what we have, starting from the brands like, Apache, Jupiter, iQube, Raider, Ntorq, Star Range, HLX, Radeon, TVS Ronin, TVS King and the recently launched TVS EV Max, we will grow faster than the industry, both in domestic and international markets. We will become a prominent player in the EV three-wheeler in India.
As you are aware, we are extremely happy that the EBITDA margin has been consistently growing the last five years. We are confident that as we delight our customers, grow the top line ahead of the industry with leveraging its — the overall growth, scale benefits, better product mix and sustained cost-reduction initiatives, we will continuously grow the profitability going forward. Thank you. Thank you for your time and your continued trust on the company. Thank you.
Operator
[Operator Closing Remarks]