TVS Motor Company Ltd. share price target

4 February 2020 TVSLs strong operating performance (driven by cost reduction), despite the volume weakness (op. leverage), was commendable and instills confidence of double-digit margins by FY22 as volumes recover. However, our FY20/21E EPS is largely unchanged as the cut in our volume estimates offsets the upgrades in the margin estimates. We maintain with a TP of ~INR460 (~18x Mar22E consol. Revenue/EBITDA declined 11.5%/3% YoY to ~INR41.2b/INR3.6b, while adj. PAT was up 1% YoY at INR1.8b. For 9MFY20, revenue/EBITDA/PAT declined ~6%/2%/4% YoY. Volume declined by ~17% YoY (-7% QoQ). Realizations were up ~7% YoY favourable FX.

Background: TVS Motors Company Limited (TVSM) is the third-largest two-wheeler manufacturer in India with revenues of INR 182bn in FY19. The company manufactures motorcycles, scooters, mopeds and three-wheelers and has a production capacity of 4mn two-wheelers and 0.12mn three-wheelers.TVS Motors is credited with many innovations in the Indian automobile industry, notable among them being the introduction of India's first two-seater moped, the TVS 50cc. The company has 4 manufacturing plants in total with three of them in India (Hosur, Mysore and Nalagarh in India and one in Indonesia, Karawang). In FY19, 40% of volumes were from sale of...

TVS Motors (TVS) is the third largest two- wheeler manufacturer in India with a market share of 14.8% in FY19. Q2FY20 revenue de-grew by 13%YoY due to sluggish Industry...

TVSL's results were operationally better as EBITDA margins came in at 8.8% Change in Estimates | Target | Reco (PLe: 7.7%), expanding +20bp YoY/ +80bp QoQ. The margins beat was led by lower RM (20bp QoQ), cost control benefits (130bp QoQ). Going forward,...

YoY (-4% QoQ) to 885.8k units in 2QFY20. Realizations increased ~7% YoY mix and price increases. Revenues were down ~13% YoY to INR43.5b. Gross 17 October 2019 driven by cost-cutting initiatives (120bp QoQ) and mix (40bp QoQ). For 1HFY20, revenue/EBITDA/PAT were down ~4%/2%/6% YoY. (a) Heavy rain during Navratras in the central/east region and Maharashtra resulted in much lower retails. However, retails have started picking up since the last few days due to receding rains. Diwali retails are expected to be good for TVSL. (b) Rural economy will likely improve either in 4QFY20 or 1QFY21 as sentiment is turning positive. (c) The strong focus on cost reduction is leading to a continuous improvement in margins. (d) TVSL expects further commodity cost benefit in 2HFY20. (e) Inventory is stable at five weeks.

Impressive Performance Continues Maintain BUY: During Q2FY20, TVS sales declined by 12.9 percent YoY to Rs43.5bn (above our estimatesRs41.5 bn).

Background: TVS Motors Company Limited (TVSM), the third-largest two-wheeler manufacturer in India, is a part of TVS Group; it manufactures motorcycles, scooters, mopeds and three-wheelers in India. TVS Motors is credited with many innovations in the Indian automobile industry, notable among them being the introduction of India's first two-seater moped, the TVS 50cc. The company has presence in all the three sub-segments of two wheelers, i.e., motorcycles, scooters...

TVS Motors (TVS) is the third largest two- wheeler manufacturer in India with market share of 14.8% in FY19. Q1FY20 revenue grew by 7%YoY owing to marginal price hike and increase in export sales(+10%YoY). Volume for the quarter came at negative 1%YoY, largely accounts to sluggish domestic demand. EBITDA margin improved by 30bps (in line with our estimates) owing to lower input cost and cost control measures. However PAT de-grew by 3%YoY due to higher interest & depreciation cost....

TVS motors (TVSL) Q1FY20 results were above our and consensus estimates at operating level. EBITDA margin for the quarter stood at 8.0% which was above our and consensus estimates of 7.0% and 7.3% respectively mainly on account of low RM cost. We cut our volume and revenue estimates by 10% and 14% for FY20E factoring slower growth for 2W in YTD-FY20. We have built in revenue/earning CAGR of 6% and 8% over FY19-FY21E respectively with EBITDA margin of ~8.1%. We change our rating to SELL (earlier REDUCE) and TP to Rs310 (earlier Rs430). We reduce our target multiple and value the company at 19x (earlier 21x) on account of demand uncertainty and higher...

TVS Motor Co (TVSL) reported in-line operating performance in Q1FY20 as net sales stood at Rs 44.7bn (+7.6% YoY / +1.9% QoQ) led by higher realizations which stood at Rs 48k (+8.2% YoY / +0.2% QoQ). Gross margins at 24.9% (+104bps YoY/ +149bps QoQ) was due to higher export mix and softening of commodity prices. The EBITDA margin stood at 8% (+58bps YoY/ +93bps QoQ) vs our est of 7.2% on account of efforts towards cost reduction through value engineering. On the concall, management highlighted that demand will remain weak in Q2 FY20....