MOSL: TVS MOTOR COMPANY (Neutral)-Mix, Fx led beat on margins-management expects recovery from 4Q
TVS MOTOR COMPANY: Mix, Fx led beat on margins; management expects recovery from 4Q
(TVSL IN, Mkt Cap USD3.7b, CMP INR554, TP INR576, 4% Upside, Neutral)
- Realizations at record level: TVSL reported healthy 3QFY19 results with realizations growing 5.3% YoY (+2.7% QoQ) to INR47.1k (v/s est. INR46k) driven by improvement in mix, price increase (0.6%) and favorable forex. Volumes grew 20% YoY (-9% QoQ) to 989.7k units. Consequently, revenues grew 26% YoY to INR46.6b (in line), while gross margins came in at 24.2%, declining -340bp YoY (flat QoQ). Staff costs were below estimate at INR2.4b (est. INR2.6b) and other expense came in slightly higher at INR5.2b (est. INR5b). EBITDA came in higher at INR3.8b (INR3.5b) leading to EBITDA margin of 8.1% (est. 7.7%, flat YoY, -50bp QoQ). Adjusted PAT was at INR1.8b (est. INR1.6b, increasing 15.6% YoY (-15.6% QoQ). For 9MFY19, revenue/EBITDA/PAT grew 24%/29%/8%.
- Earnings call highlights: (a) Cost control initiatives aided EBITDA (9MFY19) margins by ~80bp, (b) price increase was 0.6% in 3QFY19 and 0.9% in 9MFY19 with an average increase of INR300/unit in Jan’19 for select models, (c) TVS Credit Services’ ramp-up continues with book size of ~INR80b and PBT of INR1.4b in 9MFY19; it now has ~52% share of volumes financed for TVS. Currently, ~50% of TVSL volume has been financed, and (d) realized USD/INR at 71.5 in 3Q (v/s 69.5 in 2Q).
TVS Motor Company Limited. TVS Motor Company Limited is engaged in the manufacturing of motorcycles, scooters, mopeds, three wheelers, parts and accessories. The Company's motorcycles include Apache Series RTR, Phoenix 125, Victor, StaR City+, Sport and Max4R. Its scooters include Jupiter, Wego, Scooty Zest 110, Scooty Streak and Scooty Pep +. Its mopeds include XL 100, XL Super and XL Super Heavy Duty. Its three wheelers include TVS King. It has approximately four manufacturing plants, approximately three located in India (Hosur, Tamil Nadu; Mysore, Karnataka, and Nalagarh, Himachal Pradesh) and one in Indonesia (Karawang). The Company's TVSM Service(Beta) mobile application features include service schedules, service booking, and news and updates, among others. Its subsidiaries include PT. TVS Motor Company Indonesia, TVS Motor Company (Europe) B.V., TVS Motor (Singapore) Pte. Limited, Sundaram Business Development Consulting (Shanghai) Company Limited and Sundaram Holding USA Inc., among others.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.