TVS Motor Company plans to increase its annual two-wheeler manufacturing capacity from 6.8 million to 8.3 million units by Q4 FY27 and monthly electric two-wheeler production capacity to approximately 80,000 units, driven by demand across its domestic and international two-wheeler, electric vehicle (EV) and three-wheeler businesses.

Speaking during the company's Q2 FY27 analyst call on October 28th, management said TVS Motor was producing 60,000-65,000 electric two-wheelers monthly for domestic sales and exports, with work under way on the next capacity expansion phase.

"We have already planned for the next level of capacity expansion to about 80,000. And many of the activities are already going on towards that," management said.

The company expects annual two-wheeler capacity to exceed eight million units, while three-wheeler capacity is expected to approach 400,000 units. These plans follow those outlined during the Q1 FY27 earnings call in July, when TVS Motor announced an additional 1.5 million units of annual two-wheeler capacity and plans to increase three-wheeler capacity from 250,000 to 420,000 units. The company also outlined an investment programme of approximately Rs. 35 billion (US$ 367.6 million) for capacity expansion and new product development.

TVS Motor is reviewing manufacturing capacity requirements for FY28 and beyond. Management said some additions require longer planning periods and indicated that more detailed investment guidance for FY28 and FY29 could be provided during the next quarterly call.

"Definitely we have to look at capacity for next year because market pull in the market is pretty good," management said.

Quarterly revenue and profit

In Q2 FY27, TVS Motor's standalone revenue increased 44% year-on-year to Rs. 171 billion, while net profit rose 52% to Rs. 13.8 billion. Operating EBITDA increased 47% to Rs. 22.2 billion, and the EBITDA margin improved to 13% from 12.7% a year earlier.

The company expects single-digit growth in the internal combustion engine (ICE) two-wheeler and three-wheeler industries, broadly in line with economic and GDP growth. EV growth is expected to continue, supported by increasing adoption and the existing product portfolio.

EV production and Orbiter availability

TVS Motor is increasing Orbiter electric scooter production and availability after initially prioritising the iQube to meet demand. Management said the models target different customer groups, with the iQube positioned as a family scooter and the Orbiter aimed at a separate segment.

"So Orbiter availability has gone up," management said, adding that Orbiter exports had begun. Further capacity expansion during Q4 is expected to improve availability and sales volumes, although the company did not specify when monthly EV production capacity would reach 80,000 units.

Management said rural EV demand grew slightly faster than urban demand in the first half of FY27, indicating increased adoption beyond major urban centres. TVS Motor introduced the MillionR special edition of the iQube to mark a milestone in its electric mobility business. Management said the model had contributed to the company's position in the electric two-wheeler segment.

Three-wheeler capacity expansion

TVS Motor is increasing three-wheeler manufacturing capacity to meet domestic and international demand. Electric three-wheelers accounted for approximately 44% of domestic industry volumes in Q2, with penetration approaching 48% in September. The company plans to expand its EV portfolio and presence in the electric three-wheeler segment, with additional capacity intended to support growth during Q3 and Q4.

International business and product launches

Africa contributed to TVS Motor's international business, alongside Latin America and Asia. International ICE two-wheeler sales increased 33%, compared with industry growth of 27%, while overall ICE two-wheeler sales rose 20%, against industry growth of 14%.

Management expects the international two-wheeler and three-wheeler businesses to continue outperforming their respective industries. The company is expanding its international presence through new market entries, product launches, distribution network expansion and engagement with sales channels.

During the quarter, TVS Motor launched the Orbiter and NTORQ 150 in Nepal. In Sri Lanka, it introduced the King EV Max, Orbiter, Apache RTR 160 4V, RTR 200 4V with TFT versions, RTR 310 and RR 310. It also launched the Apache RR 310 and iQube in Kenya, the Raider in Egypt and the Callisto 110 in Jakarta. Management expects further product introductions in international markets.

Domestic demand

Management described domestic demand as steady and Dussehra sales as encouraging ahead of the Diwali festive period. The scooter category, including electric models, accounts for approximately 41% of India's two-wheeler market. Management said the ICE scooter market had not contracted and the overall category continued to expand.

During the quarter, the TVS Jupiter crossed nine million cumulative sales more than 13 years after its introduction, while the iQube reached one million cumulative sales. Management expects TVS Motor to outperform the industry in domestic and international markets, with EV demand expected to continue increasing.