TVS Motor Q1 profit rises 13.2%

TVS Motor Company has reported a 13.2% growth in its net profit for the quarter ended June 30, 2018 to Rs 146.6 crore as against Rs 129.5 crore in the same quarter last fiscal. However, it missed market expectations as analysts were expecting the profit of around Rs 170 crore. In spite of a strong 14% growth in total two-wheeler sales (including exports) to 8.93 lakh units in the quarter under review as compared to 7.85 lakh units sold in the quarter ended June 2017, the profit was not on the expected line due to a sharp rise in material costs to Rs 3,254.50 crore as compared to Rs 2,444.40 crore in the same quarter last fiscal. In the fourth quarter of 2018 fiscal, the material costs were at Rs 2,904 crore.

In addition to that, the provision for taxes during the quarter under review also shot up to Rs 66 crore as compared to Rs 50 crore in the same quarter last fiscal. Due to better realisation, Ebitda margin grew by 70 basis points to 7.4% during the quarter under review as against 6.7%. Ebitda for quarter ended June 2018 grew 35% to Rs 306.5 crore as compared to Rs 227.9 crore in same quarter of last fiscal.

Riding high on the sharp growth in volume (units sale), the revenue during the quarter grew 21% to Rs 4,171 crore (excluding excise duty) as against Rs 3,456.60 crore in the first quarter of last fiscal. The total units sale (volume) during the quarter zoomed to 928,000 as against 802,000 in the same quarter previous fiscal.

The company’s profit before tax (PBT) grew sharply to Rs 212.4 crore as against Rs 179.4 crore which included a notional fair valuation gain of Rs 36.6 crore and a one time GST discount of Rs 16.5 crore given to dealers for the quarter ended June 2017. In a statement here on Tuesday, the company said during the quarter, the motorcycles sales grew 17% to 3.87 lakh units in the quarter ended June 2018 from 3.30 lakh units registered in the quarter ended June 2017.

Scooter sales grew 12% to 2.88 lakh units in the quarter ended June 2018 from 2.58 lakh units in the quarter ended June 2017. The total exports grew 52% to 1.90 lakh units during the quarter ended June 2018 from 1.25 lakh units in the quarter ended June 2017. Total three-wheelers doubled from 17,000 units in the quarter ended June 2017 to 36,000 units in the quarter ended June 2018. During the quarter, the company made an equity investment of Rs 26.85 crore in its Indonesian subsidiary PT TVS Motor Company and Rs 25 crore into equity shares of TVS Credit Services, Chennai.