TVS Motor Co Ltd, India's third-largest two wheeler maker, reported a 12.6 percent fall in July-September profit and added it expects adverse market conditions to continue for the next 18 months.
The Chennai-based firm reported a net profit of 104 million rupees compared with 119 million rupees in the same period last year, while revenue rose 23 percent to 10.3 billion rupees.
Adverse retail financing, a global credit crunch and concerns of world-wide slowdown is expected to hurt the Indian two-wheeler industry in coming months, Chairman Venu Srinivsan told Reuters.
"We are seeing in the next 18 months at least a 10 percent decline in two wheeler industry sales," Srinivasan said on Thursday. "The key thing is to conserve cash and keep costs down, we also have to keep a tight control on capital expenditure."
Last week, Srinivasan told Reuters that the firm was cutting down its annual investment plans to about 750 million rupees from over 1 billion rupees annually over the next two years.
"We will be looking to curb material costs as commodities have softened a bit in the past one month, we will also look to control interest depreciation," he said on Thursday.
However, the Chennai-based firm would not look at cutting jobs in the near term, he added.
The current quarter witnessed "a challenging environment caused by increasing input material costs, general inflationary trends and lack of availability of retail finance," TVS said in a statement on Thursday.
"We do not expect market conditions to improve before January, 2010," Srinivasan said.
TVS Motor's year-ago quarter had a benefit of 102 million rupees, which includes a gain of 293.4 million rupees on restatement of overseas loans and expense of 191.4 million for launch of motorcycle variants.
Motorcycle sales rose to 181,000 units during the quarter compared to 144,000 units a year ago. Scooters clocked sales of 77,000 units compared to 76,000 units. Exports rose 52 percent to 55,000 units in the quarter.
Shares of TVS Motor ended down 3.47 percent at 29.25 rupees on Wednesday. The markets were closed on Thursday on account of a local holiday.
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