Accounting for just 2-4 per cent of two-wheeler sales, mopeds are primarily sold in South India, with TVS Motor Company Limited as the sole producer, the company said in its annual report.
The segment’s low-cost positioning has been challenged by rising ownership costs and a narrowing price gap with motorcycles, which has decreased from Rs 8,000-10,000 to Rs 3,000-5,000 due to product upgrades, TVS Holdings said.
The adoption of BSVI norms has resulted in an 8-10 per cent increase in prices, further impacting affordability, it added.
“Despite these developments, mopeds remain popular in rural markets, valued for their versatility and appeal to families. However, the reduced-price advantage and intensifying competition from electric vehicles are contributing to a decline in moped demand,” TVS Holdings said.
TVS Holdings also has a presence in the financial services sector through its step-down subsidiary, TVS Credit Services Ltd, classified as a middle-layer NBFC.
In fiscal 2025, the Company expanded its financial services footprint by acquiring an 80.74 per cent equity stake in Home Credit India Finance Private Limited, classified as a middle-layer NBFC, making it a subsidiary. The strategic acquisition has further bolstered the Company’s position in the financial services sector.
India’s retail credit market presents a significant opportunity, as reflected in its low household credit-to-GDP ratio of 45.5% as of the first half of calendar year 2025, compared with 60 per cent in China, 68 per cent in the United States and 74 per cent in the United Kingdom, the annual report said.
Amid financial awareness and inclusion growth, driven by government initiatives and increasing access to credit for underserved populations, credit penetration in India is poised to expand, TVS Holdings said.
The expansion is expected to be aided by the retail credit segment. Furthermore, as disposable incomes rise and financial health improves, consumers are increasingly seeking to upgrade their lifestyle, driving demand for credit to finance discretionary purchases such as vehicles and consumer durables, it added.
Inflation is expected to trend higher in fiscal 2027 as food inflation reverts from its current lows. In parallel, elevated energy prices driven by ongoing Middle East instability risk spilling over into nonfood inflation, particularly if higher crude prices persist, TVS Holdings said.
Recent developments on the US trade front, specifically, the takedown of reciprocal tariffs and the temporary introduction of 10 per cent emergency tariffs for 150 days are marginally supportive near term, the company said.
However, policy uncertainty in the US remains a material medium to long term risk.
Additionally, extreme weather events linked to climate change continue to pose an inflationary and supply-side threat. Overall, rising inflation pressures and prolonged geopolitical uncertainty represent downside risks to growth and could increase the likelihood of targeted fiscal and monetary measures to protect stability and support demand, TVS Holdings said.
Meanwhile, progress toward an India-US trade deal improved sentiments, it said.
The rupee has continued to depreciate. Sustained high crude prices and any further escalation in the Middle East are likely to maintain depreciation pressure.