Chennai , 17 Oct 2003


TVS Motor Company, one of India's premier two-wheeler manufacturers, has further consolidated its position in the second quarter ended 30th September 2003. The company recorded sales of Rs. 764.55 crores, registering a growth of 8.5% compared to Rs 705.05 crores achieved last year. EBITDA grew by 18% to Rs.77.4 crores for the current year as against Rs.65.34 crores last year. As a percentage also, EBITDA grew by 10.1% for the current year as against 9.2% last year. The Profit after tax for the quarter rose to Rs. 36.98 crores, a growth of 20% compared to Rs. 30.85 crores achieved during the corresponding period of last year.

The results reflect the improved portfolio of products and strong off take across all segments. With overall sales of 3.05 lakh units during the second quarter, TVS Motor Company has registered a growth of 4 per cent over 2.92 lakh units sold during second quarter of previous year. For the first half year ended September 2003, the company sold 5.78 lakh units, registering a growth of 3.8%. Of this Motorcycle sales stood at 363,127 units registering a growth of 5.1 per cent over the same period last year.

The sales turnover increased by 6.9% to Rs. 1427 crores in the first half compared to Rs. 1335 crores registered during the same period last year. For this half year, EBITDA grew to Rs.145.55 crores (10.1%) for the current year as against Rs.123.72 crores (9.2%) last year. The company saw 20% improvement in Profit After Tax of Rs. 69.06 crores over the first half-year results of previous year of Rs. 57.63 crores.

While TVS Victor continued its upward swing recording sale of over 6 lakh units in less than 23 months, the recently launched Fiero F2 too has been well received in the market. The Company is in the process of ramping up its production to meet the additional demand.

Yet another success story has been the recently launched TVS Scooty Pep that has registered a strong demand in the market post its recent launch. TVS Scooty Pep presently commands a waiting period. This 'Fuel efficient' TVS Scooty Pep - is today amongst the best fuel-efficient products in its category and makes it a great choice for customers. The total Scooterettes sales in second quarter stood at 54896 an increase of over 19% compared to the same period last year.

Mopeds sales of 65,607 units during the second quarter is also encouraging recording a growth of 1.7% over last year, especially in the context of decline witnessed by the moped segment consequent to poor monsoons. The Company continues to maintain its market leadership in the moped segment.

Continuing its strong performance in the International Market, TVS Motor Company has achieved yet another milestone. The Company has exported over 7288 units of two wheelers in the second quarter as against 2810 units in the same period in the previous year registering a growth of 160%. The cumulative export for the first half was 12,000 nos. compared to 4,800 nos. in the corresponding period of last year, achieving a growth of 150%. In value terms, exports grew to 28.6 crores from Rs. 12 crores, an increase of 138%.

Interim Dividend
Considering the overall improvement in performance, the Board of Directors in a meeting held today declared an interim dividend of Rs. 6 per share (60%).

Merger of Lakshmi Auto Components with TVS Motor Company
Subject to the approval of the Shareholders and other statutory requirements, the Board of Directors have proposed to effect a merger of Engine Components Division of Lakshmi Auto Components Co. Ltd (LAC) with its holding company, TVS Motor Company. This division is a captive supplier to TVS Motor Company and hence the merger will lead to considerable synergistic benefits.

The Board of Directors have recommended one share in TVS Motor Company for every seven shares in LAC, after due consideration of the valuation report submitted by M/S Deloitte, Haskins & Sells, Mumbai.

The other two divisions of LAC, manufacturing plastics and rubber components cater to automotive and non automotive applications and therefore, are being transferred to its wholly owned subsidiary Sundaram Auto Components Ltd (SACL)

The transfer of these divisions to SACL and merger of the engine components division of LAC is being proposed to be effected through a scheme of arrangement, subject to the approval of the shareholders and the High Court of Madras in terms of sections 391 - 394 of the Companies Act, 1956. This will considerably enhance the shareholder value.

Sub Division of Shares
In line with company's policy to continuously improve the shareholder value and also to facilitate greater liquidity for the shares of TVS Motor Company, it has been proposed for the approval of the shareholders that the equity shares of TVS M having a face value of Rs. 10 each per share be subdivided into equity shares of face value of Re 1/- each.

This will be implemented on receipt of the approval of the shareholders at a meeting to be convened for this purpose. The shareholders of LAC will also be eligible for the sub divided shares on completion of the merger.