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TVS Group eyes 10-15% revenue growth in FY17

 

Workers at a TVS plant in Chennai

Workers at a TVS plant in Chennai

 

  The $6.5-billion TVS Group expects to close the current financial year (FY17) with 10-15% growth in revenue at group level. The Group comprises 50-odd companies including TVS Motor.

 

According to Suresh Krishna, chairman of TVS & Sons, the holding company of TVS Group, the pains from demonetisation have subsided and things will start improving now.
 

He, however, conceded that December was a tough month especially for second-hand car and two-wheeler businesses, which are mostly done through cash transaction.
 

“The cyclone (demonetisation effect) is still lingering, but there is only drizzling now and no strong winds.

In two or three months, everything will be normalised,” said Krishna, who expects better times from the fourth quarter of current financial year. 

According to Krishna, who is also the former chairman of the Confederation of Indian Industry, the other factors that will aide the growth in 2017 include the goods and services tax (GST). Agriculture is reasonably good, inflation is contained, interest rate is good and people are welcoming the government's reforms, he added.

“People are patient and I'm very surprised that India did not erupt because of this problem, which shows people have understood the fundamentals on which demonetisation was done,” Krishna noted.

According to him, the automobile industry has good potential and its a sunrise sector. TVS Group will continue to focus on that, he said.

According to sources, of the total revenue of the Group, around $2.5 billion comes from auto components, followed by dealership and logistics at $1.8 billion, and two-wheelers (TVS Motor) at $1.7 billion. The non-automotive sectors, mainly information technology, hardware and electronics, contribute around $500 million. The numbers do not include finance businesses of the Group.

In recent years, logistics has been one of the major growth drivers for the group. This business is headed by R Dinesh, a TVS family member.

TVS Logistics Services, a third-party logistics service provider, has grown at a compounded annual growth rate (CAGR) of 30% and has a strong global track record of growth, both organically and through acquisitions.

It is getting ready for the second phase of growth. TVS Logistics has set a target of $3 billion over the next three years. 

Last year, the company clocked around Rs 4,200 crore revenue and it targets to close 2016-17 with a revenue of around Rs 5,700 crore, said Dinesh, managing director of TVS Logistics Services.

Earlier, TVS Logistics' focus was predominantly on automobile, but in the past few years it has started catering to e-commerce, defence and other sectors.