CARE Ratings Reaffirms TVS Motor's AA+ Long-Term Rating with Stable Outlook
The reaffirmation of stable, high credit ratings provides confidence in the company's financial stability and operational strength, which can positively influence borrowing costs and investor perception, but it is not an upgrade.
The reaffirmation of high credit ratings (AA+; Stable and A1+) for TVS Motor's various facilities reflects its strong business and financial risk profiles, improving market share, and robust liquidity, despite identified constraints.
TVS Motor Company Limited (TVSMOTOR) announced on 6 September 2025 that CARE Ratings Limited reaffirmed its credit ratings for various instruments, with a 'Stable' outlook. * Long-term bank facilities totaling ₹2,500.00 crore were reaffirmed at CARE AA+; Stable. * Long-term / Short-term bank facilities of ₹550.00 crore were reaffirmed at CARE AA+; Stable / CARE A1+. * Short-term bank facilities of ₹608.00 crore and Commercial paper of ₹500.00 crore were reaffirmed at CARE A1+. * Non-convertible debentures amounting to ₹325.00 crore were reaffirmed at CARE AA+; Stable. * A new rating of CARE A1+ was assigned to Non-convertible redeemable preference shares of ₹1,900.35 crore.
The ratings reflect TVS Motor's strong business risk profile, marked by an established position in the two-wheeler segment with improving market share in both internal combustion engine (ICE) and electric vehicle (EV) categories. Its overall two-wheeler market share improved to 19.4% in FY25 and further to 21.2% in Q1FY26. The company also maintains a strong position in the three-wheeler segment and has a diversified geographic profile. The robust financial risk profile is supported by strong debt coverage metrics and liquidity. The automobile business's operating profit margins marginally improved to 10.20% in FY25 from 9.63% in FY24, and remained healthy at 10.21% in Q1FY26. Liquidity remains strong with cash and liquid investments of ₹805 crore as on 31 March 2025, and expected cash accruals of approximately ₹3,300 crore in FY26.
However, the ratings are constrained by exposure to commodity price and currency risks, a highly competitive industry, and significant investments in subsidiaries, some of which are loss-making. Total investments in equity instruments stood at approximately 93% of standalone net worth as on 31 March 2025. The planned issue of ₹1,900 crore in Non-convertible redeemable preference shares in FY26 is expected to delay deleveraging and limit liquidity build-up in the near-term for its automobile business.
The 'Stable' outlook reflects the company's ability to maintain and improve its market position and the expectation of a stable demand scenario sustaining its healthy business profile in the medium term.
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TVS Motor Company Limited filed this with the NSE as a statutory disclosure, categorised under credit ratings. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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See the model portfoliosA plain-language summary of a public exchange filing by TVS Motor Company Limited. Read the original for the full detail.