Dear All,
Forwarding you the Result Flash note on TVS Motor for 4QFY2011.
TVS Motor - 4QFY2011 Results
| Y/E March (Rs cr) | 4QFY11 | 4QFY10 | % chg (yoy) | Angel Est. | % Diff. |
| Net Sales | 1,633 | 1,216 | 34.3 | 1,693 | (3.5) |
| EBITDA | 91.3 | 78.8 | 15.8 | 98.4 | (7.2) |
| EBITDA Margin (%) | 5.6 | 6.5 | (89)bp | 5.8 | (22)bp |
| Reported PAT | 41.7 | 20.3 | 105.4 | 49.6 | (16.0) |
Source: Company, Angel Research
Review
v Lower than expected top-line performance – TVS Motor (TVS) reported 34.3% yoy growth in its top-line at Rs1,633cr, which was below our expectation of Rs1,693cr. The top-line performance was driven by ~27.4% yoy jump in volumes and 5.7% yoy increase in net average realisation at Rs30,062. Average net realization improved on a yoy basis due to superior product mix. On a sequential basis net sales declined by 0.8% primarily due to the 2.3% qoq decline in average net realisation.
v EBITDA margins decline on increased cost pressures – TVS’s EBITDA margins for 4QFY2011 came in 22bp below our estimate at 5.6%, a fall of 89bp yoy and 52bp qoq. Margin contraction was on account of increase in raw material cost pressures which increased by 443bp yoy. However, about 148bp and 217bp yoy savings in employee expenses and other expenditure helped the company to arrest margin contraction to a large extent.
v Net Profit up 105.4% yoy – The company reported net profit growth of 105.4% yoy to Rs41.7cr largely aided by improved operating performance on yoy basis. However, the bottom-line performance was lower than our expectations impacted primarily due to the input cost pressures. While the decline in interest cost and depreciation expense helped the company report better net-profit growth, significant higher tax rate at 32.3% v/s average tax rate of 20% of PBT in 9MFY2011 affected the bottom-line growth negatively.
Outlook
v At current levels, the stock is trading at 12.1x FY2012E and 10.6x FY2013E earnings. We maintain our Accumulate view on the stock, however we shall revise our numbers and come up with a detailed result note and a revised Target Price.
4QFY2011 Volume Performance
| (unit) | 4QFY11 | 4QFY10 | % chg | FY2011 | FY2010 | % chg |
| TVS Motors | 533,772 | 419,131 | 27.4 | 2,046,731 | 1,536,868 | 33.2 |
| Motorcycles | 218,825 | 182,239 | 20.1 | 836,821 | 640,965 | 30.6 |
| Scooters | 123,726 | 81,030 | 52.7 | 466,264 | 309,501 | 50.7 |
| Mopeds | 179,155 | 149,589 | 19.8 | 703,717 | 571,536 | 23.1 |
| Three Wheelers | 12,066 | 6,273 | 92.3 | 39,929 | 14,866 | 168.6 |
| Exports (Inc Above ) | 70,513 | 55,282 | 27.6 | 234,411 | 165,414 | 41.7 |
Source: Company, Angel Research
4QFY2011- Standalone Performance
| Y/E March (Rs cr) | 4QFY11 | 4QFY10 | % chg | FY2011 | FY2010 | % chg |
| Net Sales | 1,633 | 1,216 | 34.3 | 6,289 | 4,430 | 42.0 |
| Consumption of RM | 1,163 | 811 | 43.3 | 4,475 | 3,021 | 48.2 |
| (% of Sales) | 71.2 | 66.7 | 71.2 | 68.2 | ||
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