TVS Motor Company Ltd. share price target

Concern on Volume growth and profitability persists Maintain HOLD: During Q2FY19, TVS sales increased by 22.8% YoY to Rs49.9bn (above our estimates Rs48.7 bn). Its EBITDA margins declined by 35bps to 8.6% (our estimates were 8.2%).

TVS Motor (TVSL) has delivered a healthy performance in 2QFY19 primarily owing to strong volume performance led by better product-mix and higher export realisation. Reported EBIDTA margin was strong due to accounting adjustment (higher by 30bps), while adjusted EBIDTA margins were broadly in line with our estimates. While revenue and EBIDTA grew by 23% YoY (+20% QoQ) and 18% YoY (+33% QoQ) to Rs49.9bn and Rs4.3bn, respectively PAT declined by 1% YoY (+44% QoQ) to Rs2.11bn. Its EBIDTA margin contracted by 35bps YoY (+87bps QoQ) to 8.6%. Volume grew by 15% YoY and 17% QoQ to 10,88,335 units on higher YoY base, while average realisation grew by 7% YoY due to clubbing the interest income from customer contracts with...

23 October 2018 Volumes grew 15% YoY (+17% QoQ) to 1.1m units. Realizations increased 7.1% YoY (-2.2% QoQ) to INR45.9k (our classification of certain interest income from other income to revenues boosted revenue/EBITDA. EBITDA margin expanded 90bp QoQ (our of 40bp QoQ), operating leverage and other income restatement to EBITDA (~20bp). Adj. PAT declined ~1% YoY (+44% QoQ) to INR2.1b (in-line). For 1HFY19, revenue/EBITDA/PAT grew 22.7%/30.5%/4.5%, implying growth of 24.1%/44.

Beat estimates on all counts; Maintain Hold We maintain our Hold rating on TVS Motor (TVS) with a TP of Rs567 as the company reported a strong operational performance during 2QFY19, above our estimates. The management highlighted that company will not go for any price discounting for its products and despite several headwinds, the company has posted moderate growth during on-going festival season. We believe TVS is on the right track with exposure to high-growth segments - scooters and premium bikes and lucrative export markets. With the export markets recovering, the company is set to maintain its growth momentum....

Beat on margins; multiple disruptions cloud growth visibility In 2QFY19, TVS Motor (TVS) reported EBITDA margin of 8.6% (-35bps YoY, +90bps QoQ), surpassing JMFe and street expectations owing to higher volumes, price increase and a favourable exchange rate. Without sharing a number, the management indicated moderate' growth during the Navratri period (including Dusshera), impacted by the increase/confusion on insurance premium. However, the Company expects strong pick-up in sales during the traditionally robust phase of Dhanteras' and Diwali', driven by positive response to new models. With increase in fuel price, hike in insurance premium and heightened competitive...

Revenue grew at a robust pace of 23% yoy to Rs49.9bn (Emkay est: Rs47.6bn; consensus est: Rs48.7bn), driven by a 15% yoy rise in volumes and a 7% yoy rise in realization. Domestic volumes grew 12%, while exports grew 29%. Management reiterated its double-digit volume growth expectation for the domestic 2W industry, despite the recent increase in insurance costs for buyers. TVSL is expected to...

Q1FY19 revenue grew by 22%YoY due to 32% volume growth and superior product mix. PAT grew lower by 13%YoY due to higher tax. EBITDA margin expanded by 120bps despite combination of commodity inflation and elevated competition. Increased penetration in the High margin premium motorcycles is becoming a game changer for the company. The category (>150cc) grew by 30%YoY. We reduce our earnings estimate for FY19/FY20 by10%/12% owing to near term pressure in margins and higher tax....

Revenue rose by 4.03% to Rs. 4153.7 Cr in Q1FY19 when compared to the previous quarter. TVS Motor Company Ltd Q1FY19 results Comment

Sector: Auto /Mid-Cap | Earnings Update 1QFY19 Background: TVS Motors Company Limited, 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 bein g 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 & mopeds as well as the three-wheeler segment. Motorcycles, scooters, mopeds and three-wheelers contribute 38%, 23%, 35% and 4%, respectively, to overall volumes . Exports (mainly Africa) currently account for 15% of the overall volumes....

Ntorq, Apache, Jupiter & Exports Power Up the Volumes; TVS continues to remain fastest growing 2W company in India. Its three brands (Jupiter, Ntorq and Apache) continue to perform exceedingly well.