The electric two-wheeler scooter market was in focus, with October being a strong month for most players. TVS Motor Co. regained its number two position by market share, as distribution increased to more than 450 cities and 750 dealers. The company now commands 21.5% market share as per VAHAN data.
Ola Electric was another notable gainer, cementing its leadership position in the electric two-wheeler space.
TVS Regains No. 2 Position
TVS Motor has been a steady performer in the electric two-wheeler segment over the last 12-18 months, while maintaining decent return ratios as well as profitability. The company now commands 21.5% market share, which is largely flat on a year on year basis but overtook Bajaj Auto Ltd. this month.
In the first half of fiscal 2025, the company introduced three new variants of iQube with different battery options. Despite increased competition from cheaper variants of Bajaj Auto Chetak and pricing pressure led by Ola Electric’s discounting strategy, the company has been able to regain its number two position.
For first half of fiscal 2025, revenues for iQube stood at Rs 1,600 crore, with a positive contribution margin.
In its first quarter earnings conference call, the company also emphasised that India will emerge as a major export hub for electric two-wheelers.
Strong Q2 For TVS
For the second quarter, the company reported a 13% YoY revenue growth but average selling prices declined 1% YoY to Rs 75,100, due to higher sales of cheaper electric scooter variants. Despite lower average selling prices, the company’s Ebitda margin came in at 11.7%, up 70 basis points compared to last year. Brokerages had estimated Ebitda margins at 11.1%. Operating profit grew 20% YoY to Rs 1,080 crore.
TVS has also not yet booked the PLI benefits in first half of fiscal 2025, although it is eligible for the same. This will be another positive benefit on Ebitda margins whenever accrued.
According to Motilal Oswal, TVS’ robust performance in EVs demonstrates its adaptability and resilience to changing market dynamics, reassuring investors that the company is evolving into a tech-agnostic play. Motilal Oswal Financial Services Ltd. also expects the company to continue to work on improving its profitability and factors in 150 bp expansion in margin over FY24-27E.
Ola Electric's Higher Discounts Help Strengthen Leadership
Ola Electric has had a tough few months with increasing competition from Bajaj Auto and TVS Motor, with their respective launches of cheaper variants in the market. But it has gained 260 basis points in market share compared to last month, led by higher discounts. The company launched ‘BOSS - Biggest Ola Season Sale’, offering S1 scooter portfolio starting at Rs 49,999 versus general market pricing of Rs 74,999 and festive offers worth up to Rs 40,000.
Bajaj Auto: A Formidable Competitor
Bajaj Auto has also emerged a formidable competitor, despite being a late starter in the electric two-wheeler space. The company’s alternate fuel strategy, especially in two and three wheelers and the new cheaper variants launched by the company helped it gain 800 basis points in market share compared to last year.
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