TVS Motor Q2 net profit rises 21% to Rs 255 crore

Aided strongly by an one-time gain of Rs 76 crore coupled with a 7% increase in average price realisation (APR), TVS Motor Company has beaten market expectations by posting a 21% growth in its net profit for the quarter ended September 30, 2019 to Rs 255 crore, compared to Rs 211.31 crore in the same quarter last fiscal.

Despite a 19% drop in its volume (sales) during the quarter, the company could post a higher Ebitda margin (a growth of 21 basis points year-on-year) to 8.8% as compared to 8.6% in the same quarter last fiscal (and 8% in the previous quarter). This could be possible due to better product mix, higher exports and correction at inventory levels, thereby beating the market expectations of 7.2%.

Revenue during the quarter declined by 13% to Rs 4,352.74 crore as compared to Rs 4,994.20 crore in the same quarter last fiscal.

Mitul Shah, senior research analyst, Reliance Securities, said: “TVS Motor delivered strong 2QFY20 result with its Ebitda margins of 8.8% coming in 160 bps higher than our estimates. Its revenue was in line with our estimate to Rs 43.5 billion, down 13% YoY (-3% QoQ) on the back of volume decline of 19% YoY (-4% QoQ) to 885,832 units.”

TVS Motor Company