TVS Motor, an Indian automobile manufacturer, was surprised with a 31.7% increase in its second-quarter profit, primarily fueled by robust demand for its budget-friendly two-wheelers and electric vehicles. The company's profit for the quarter ending on September 30 reached INR 5.27 billion ($63.33 million), exceeding analysts' expectations, who had estimated a profit of INR 5.25 billion, according to LSEG data.

The success can be attributed to offerings like the Raider 125 motorcycle in the executive segment, which helped the company expand its market share. Jay Kale, Vice President at Elara Capital, noted that the production issues related to chip supply shortages that had plagued the company in the previous year have been resolved.

TVS Motor witnessed a 10% increase in scooter sales and a 3% rise in motorcycle sales during the quarter. In the executive segment, which includes base model motorbikes and scooters priced between $650 and $1,140, domestic sales more than doubled, according to data from the Society of Indian Automobile Manufacturers (SIAM).

The company also experienced a significant surge in electric vehicle sales, with a nearly 3.6-fold increase compared to the previous year, totaling 580,000 units. TVS Motor now holds the second-largest market share in the Indian electric two-wheeler sector.

However, the company faced challenges in its international markets, particularly in Africa, where currency availability issues and macroeconomic pressures led to a decline in demand and a more than 5% drop in exports compared to the previous year.

TVS Motor's larger rival, Bajaj Auto, also reported sluggish revenue growth recently due to weak rural demand for its two-wheelers.

Despite these challenges, TVS Motor's shares closed more than 1% higher ahead of its Q2 results. They have risen by more than 48% year-to-date, outperforming the Nifty Auto index, which has seen a 27% increase.