Inside Sudarshan Venu’s bet to electrify TVS

When Sudarshan Venu took charge as Managing Director of TVS Motor in 2022, he had his job cut out: steering the company through the uncertain aftermath of Covid-19, and making sure it stayed at the top as India’s scooter and motorbike market readied for more intense competition.

The industry was on the cusp of change sparked by the electrification of vehicles and their premiumisation—turning out products that promised enhanced features and higher quality to customers who wanted more and could afford to pay more.

In the three subsequent years, the 36-year-old son of Chairman Emeritus Venu Srinivasan seems to have earned payback for the razor-sharp focus he has maintained on his job: the company’s return on equity (ROE), a measure of profitability, stands at 28.95% and its market capitalisation at Rs 1,06,854 crore. As of March 31, 2021, its market value had been Rs 27,795 crore and ROE 17.1%.

Not only has TVS Motor, a Chennai-based company founded by his great grandfather, expanded rapidly in the Indian market under Venu’s leadership, it has grown in Asia, Africa and Europe as well.

Venu, joint Managing Director between 2014 and 2022, modestly rebuffs any personal credit for TVS Motor’s resilience and resurgence in the post-pandemic era.

The fourth-generation scion of the TVS group’s founding family, who holds a Graduate Degree with Honors in the Jerome Fisher Program in Management and Technology from the University of Pennsylvania, says it was all the result of a “team effort inspired by his father’s vision,” which he describes as the bedrock of TVS Motor’s growth over the years.

A stronger brand focus and distribution network has contributed to the improved performance of TVS Motor, which saw its stock post a return of 278% in the three years between December 31, 2021, and December 31, 2024, compared with a 36% gain in the benchmark Nifty during the same period.

Harshvardhan Sharma, head of the auto retail consulting practice at Nomura Research Institute (NRI), says with its deep market penetration, EV road map and global expansion strategy, TVS Motor has the potential to be India’s most dominant two-wheeler manufacturer in the next decade.

Sharma says a structured EV growth model, global expansion and a multi-source procurement strategy reducing its dependence on China-based lithium-ion battery supply chains have contributed to TVS Motor’s growth. “Additionally, 70% of new ICE two-wheeler demand is coming from Tier-II and III cities. TVS’ Raider 125 and Jupiter 110 models cater to these customers,” adds Sharma. ICE is short for internal combustion engine.

Between April and December of FY25, TVS Motor posted gross sales of Rs 32,843 crore, up 12.8% from Rs 29,102 crore a year prior. Operating profit grew 16.6% to Rs 4,208 crore and net profit 24.19% to Rs 1,740 crore in the same period.

Electric shows the way

Going ahead, Venu is betting big on electrification. TVS Motor has committed an investment of Rs 10,000 crore towards battery technology research and development, and battery charging infrastructure partnerships.

It was among the early movers in the electric two-wheeler industry, launching its first electric scooter, the TVS iQube, in 2020. The company overcame initial setbacks to post impressive sales in the last three years.

TVS Motor was struggling with dismal EV sales and market share (2% in FY21 and 4% in FY22) when Venu stepped in. Several start-ups had stolen a march over the company.

Its aggressive pricing and a connected vehicle strategy, or emphasis on vehicles with internet connectivity, paid off. Between calendar year 2022 (CY22) and CY24, the company’s electric two-wheeler sales shot up from 47,182 units to 221,293. In CY24, TVS Motor had a market share of 19% in the electric two-wheeler segment.

The company has also started deliveries of its second electric family scooter (after iQube), the TVS X. Another variant is in the pipeline. TVS Motor is also introducing an electric motorcycle. The company will offer an entire portfolio of electric two-wheelers, says Venu.

With electrification at the heart of the company’s long-term strategy, TVS Motor launched its first electric three-wheeler and an electric bicycle this January.

Electric three-wheelers

The company plans to roll out electric three-wheelers in the cargo segment as well. “Our focus is now to achieve similar market share in the electric three-wheeler segment as that of ICE three-wheeler segment. We will look to double our volumes in the domestic market. In the international market, we already have a significant presence,” says Venu.

To expand its presence in the premium electric three-wheeler segment, TVS Motor has partnered Hyundai Motor India Limited to cater to customers of last-mile delivery services. The company will be launching products powered by ethanol and Compressed Natural Gas (CNG) too.

Going Premium

Premiumisation remains a focus area for TVS Motor, which will be launching the TVS Apache RTX 300 this year. TVS Motor, through its partnership with BMW Motorrad, already had a presence in the market for bikes above 300cc capacity such as the BMW G310 R and BMW 310 GS. These models are manufactured at the TVS facility in Hosur, Tamil Nadu, to quality specifications by BMW.

The company is simultaneously scripting a turnaround story for the UK motorcycle brand Norton, synonymous with premium bikes. TVS Motor purchased the 126-year-old brand in 2020 and plans an investment of £200 million pounds.

TVS will be launching six products including an electric Norton motorcycle in the next two-three years.

The company will be launching the first revamped Norton bike in the second half of this year. Moving ahead, TVS Motor also has plans for expansion in South-east Asia, South America and the industralised markets of Europe and America.

Rahul Agarwal, auto sector lead analyst at HDFC Securities, says: “TVS’s ability to balance growth and profitability makes it a strong mid-term investment bet. The company’s EBITDA margin growth and robust export pipeline set it apart from the competition.”

Even as TVS Motor scouts overseas markets, it is not diluting its focus on the domestic two-wheeler market, in which it plans to launch a raft of products in the coming months. The company accounts for more than 30% market share in the above 100 cc motorcycle segment in India. In scooters, the company’s market share, through Jupiter, stands at 25%, second only to Honda, which has a 43% market share. In CY24, TVS Motor sold 3,238,852 two-wheelers.

TVS Motor plans to scale up its financial services business. “Now we have an AUM of about Rs 33,000 crore in our NBFC. And in the next two years, we will look to go closer to our target of Rs 50,000 crore,” says Venu, who is also Managing Director of TVS Holdings Ltd, the group holding company, and Chairman of TVS Credit Services, the NBFC arm. AUM is short for Assets Under Management. NBFC stands for Non-Banking Financial Company.

Venu observes that financial inclusion and penetration in India offers a massive opportunity for TVS Credit Services to grow in a market where it already has 30 million customers. “The digital payments infrastructure is in place. We are a large financier of cell phones and consumer loans, and we will look to get into newer segments like gold and home loans as well as we expand our franchise,” says Venu. 

@OrielAstha11