TVS Motor Share Price Rallies as Electric Two-Wheeler Sales More Than Double, Margins Improve; Board Approves Finance Business Demerger

TVS Motor Company’s automotive business has been expanding across scooters, motorcycles, electric vehicles and overseas markets, while its financial services operations remain material to the broader group. Against that backdrop, the company reported record second-quarter performance for FY2026-27 and approved a plan to separate its consumer finance and related businesses.

Revenue for the quarter ended September 2026 rose 44 per cent YoY to Rs 17,103 crore, while profit after Tax (PAT) increased 52 per cent to Rs 1,377 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 47 per cent to Rs 2,219 crore, with EBITDA margin improving by 30 basis points to 13 per cent.

Vehicle demand remained broad-based. Total two- and three-wheeler sales rose 27 per cent to a record 1.9 million units. Motorcycle sales increased 28 per cent to 0.9 million units, while scooter volumes climbed 29 per cent to 0.8 million units. International business sales grew 35 per cent to 0.5 million units. Electric two-wheeler sales more than doubled, rising 133 per cent to 186,186 units, while three-wheeler sales increased 47 per cent to 78,475 units.

Alongside the results, the board approved a Composite Scheme of Arrangement to demerge its consumer finance, leasing, investment and related support businesses into Harita ARC Limited, a wholly owned subsidiary. Shareholders are proposed to receive one share in the resulting company for every TVS Motor share held, subject to shareholder, regulatory and statutory approvals. The undertaking recorded turnover of Rs 3,921 crore for the period ended September 30, 2026, against TVS Motor’s total turnover of Rs 35,770 crore.

TVS Motor also approved the acquisition of STPL Trading and Services for Rs 530.08 crore in cash. STPL owns a 7.5 per cent stake in Home Credit India Finance. Following the proposed merger of Home Credit India with TVS Credit Services, TVS Motor expects to obtain an additional holding of about 2.4 per cent in TVS Credit Services. The transaction is targeted for completion by December 31, 2026.

At 3:05 pm on October 28, 2026, TVS Motor shares were trading at Rs 4,256.00. The stock was up 4.34 per cent from the previous close and stood about 4.4 per cent below its 52-week high of Rs 4,454.10. Over one year, the shares gained 16.42 per cent, compared with a 9.01 per cent decline in the BSE 500 over the same period. The company’s market capitalisation was Rs 1,93,779 crore.

What This Means for Investors

The quarter strengthens the case that TVS Motor’s automotive growth is broadening across scooters, motorcycles, electric vehicles and overseas markets. The finance demerger would separate an undertaking that accounted for nearly 11 per cent of group turnover in the period ended September 30, 2026. Equal share issuance means existing holders would directly participate in the resulting finance company, while the merger of TVS Motor Services is intended to simplify the remaining structure.

Strategically, the steps are supportive of organisational clarity, but their earnings effect depends on approvals, execution of the Home Credit transaction and the performance of the credit business after separation. At 56.53 times trailing 12-month earnings, the shares already reflect substantial expectations of growth and execution. Sustained margin expansion will matter, particularly because commodity costs, electric vehicle profitability and export market conditions remain material variables.

Disclaimer: The article is for informational purposes only and not investment advice.