India’s TVS, Bajaj Auto forecast challenges to export recovery

By VarunVyas Hebbalalu, Nandan Mandayam and Kashish Tandon

BENGALURU (Reuters) -India’s TVS Motor and Bajaj Auto on Wednesday forecast lingering challenges to recovery in exports, even as both beat third-quarter profit estimates.

Successive festive and wedding seasons, periods when Indians prefer to make big-ticket purchases, helped TVS and Bajaj Auto post profits comfortably above analyst estimates for the quarter ended Dec. 31.

On top of festive season, Bajaj Auto also benefited from strong demand for its premium motorcycles, led by the two Triumph models.

The two-wheeler makers extended strong profits from the September-quarter, which had propelled their stocks and the Nifty Auto index to record highs. Still, exports remain a roadblock.

The companies, which share export regions in South America, Africa, and South Asia, had faced trouble selling their vehicles overseas.

“(Export demand) is inching its way back, but still far from where we would like to see it,” Dinesh Thapar, Bajaj Auto’s financial chief, said in a post-earnings call.

The Pulsar motorcycle-maker’s two-wheeler exports fell 3% year-on-year in the quarter ended Dec. 31, while TVS’ two-wheeler exports rose roughly 4%.

Currency depreciation challenges persist in Africa, one of TVS’ largest export markets, CEO K. N. Radhakrishnan said in a post-earnings call.

The companies have been attempting to expand their international presence, with TVS entering the European market through an import-and-distribution agreement with Emil Frey.

Bajaj Auto’s Thapar also said that the company has started exports of its Triumph motorcycles to the United States, the UK, Japan, Australia, and Poland.

“In the quarter, of the 15,000 units of Triumph we sold, about 7,000 went to export markets,” he said.

Exports make up about 20% of TVS’ two-wheeler sales and 37% of Bajaj Auto’s.

($1 = 83.1070 Indian rupees)

(Reporting by Nandan Mandayam, Indranil Sarkar, Varun Vyas, and Kashish Tandon in Bengaluru; Editing by Eileen Soreng and Varun H K)