TVS Motor couldn't hold on to its day's high of Rs 426 on Tuesday after the company reported disappointing sales for the month of March 2003.

Even so, the scrip of the two-wheeler major was trading higher by 1.34% at Rs 415. It recorded a volume of 1,171 shares on BSE by 12:10 IST. In 27 sessions between 19 February and 31 March 2003, the scrip lost 22.13% to Rs 409.50 from Rs 525.90.

For March 2003, TVS Motors registered a marginal 1.8% rise in motorcycle sales to 55,659 units, from 54,675 units in the year-ago month. The Chennai-headquartered company said that combined sales of motorcycles, scooters and mopeds in March 2003 dropped by 2.87% to 85,015 units, from 87,523 a year ago.

Month-on-month, TVS Motor reported a fall in its motorcycle sales by 15.05%, from 65,523 units in February 2003. Overall sales of two-wheelers also dropped by 12.54%, from 97,209 units in February 2003.

Analysts say the poor sales numbers were expected, as reflected in the share price of TVS. The impact of the poor monsoon is being easily seen in the sales figures of TVS.

Earlier, there were reports that overall motorcycle sector sales were expected to be lower by 8%-10% m-o-m in March 2003 but were expected to grow marginally on a y-o-y basis. Motorcycle sales grew by 14% y-o-y in January 2003 and 17% in February 2003. The northern markets are believed to be the worst hit in terms of volumes, followed by the southern and western markets in that order. Rising cost of fuel, the eyeball-capturing Cricket World Cup and the Holi Festival have been primary factors for the sharp decline in two-wheeler volumes. Analysts also say that bike sales have been affected by weak rural demand which, in turn, is due to a bad monsoon last year.

Despite the company coming out with new bike and scooter launches, analysts say that it is unlikely that the company can expect any great success like the highly successful Victor did. Two variants of Victor will be launched in August 2003. TVS Motor is also foraying into the three-wheeler segment – it is considering setting up a new unit on the surplus land available at the present plant situated in Mysore.

Analysts feel if the coming few months do not see demand rising for motorcycles, then two-wheeler companies will have to revise sales numbers for FY 2003-04. Earlier, in February 2003, the company announced that it hopes to boost two-wheeler sales by about 16% to about 1.40 million units during 2003-04.

Last month, TVS Motor announced that its turnover will leap by 52.6% to Rs 2,900 crore (Rs 29 billion) this financial year, riding on the back of rising motorcycle sales. The company plans to overtake Bajaj Auto to become India's second largest two-wheeler maker next fiscal.

TVS Motor said that most of the growth will come from motorcycles as its recently launched 'Victor' model has been witnessing rising sales during this financial year. The company said that its turnover should be Rs 2,900 crore (Rs 29 billion) in 2002-03 as against Rs 1,900 crore (Rs 19 billion) in 2001-02. In 2003-04, it expects a turnover of Rs 3,400 crore (Rs 34 billion) to Rs 3,500 crore (Rs 35 billion), a growth of about 17-20%.

For the third quarter ended 31 December 2003, the company recorded a net profit rise of 204% to Rs 32.48 crore on 36.3% increase in total income to Rs 713.36 crore (Rs 7.13 billion).