Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

TVSL - Q1 FY22 first cut - YES Securities

Posted On: 2021-08-01 06:05:37 (Time Zone: UTC)

Increasing EV investments | Double digit margins focus | Healthy exports outlook - Not rated

- Revenues declined 26% QoQ to Rs39.3b as volume fell 29% QoQ to ~658k units while realization grew 4.3% QoQ to Rs59.8k/unit.

- Gross margins contracted 40bp QoQ (-20bp YoY) at 24.3% as RM inflation impact would be partially offset by price hikes.

- However, negative operating leverage led to ~49% QoQ decline in EBITDA to Rs2.7b (cons Rs3.2b) with margins at 7% (cons 8.2%, -310bp QoQ).

- Higher depreciation at Rs1.43b (v/s Rs1.36b QoQ) dented adj.PAT decline by 71% QoQ to Rs833m (cons Rs1.25b).

- TVS has made total investment of ~Rs1.24b in subs during the quarter.

- Stock trades at 21x of bloom FY23 EPS. Not Rated

Call highlights

- Demand- Exports momentum to continue while domestic 2W sales to be much better from Sep/Oct. Exports markets too are witnessing premiumization. Share of premium product at 35% in 1QFY22.

- Price increase - 1.1% in 1QFY22 and 2.4% in July-21. Uncovered RM inflation is still 0.5% which should be managed through price hikes, premium mix and cost control.

- EV investment - Envisaged capex of Rs10b over next few years of which Rs3b is already spend. iQube capacity is 10k units/month and will be enhancing capacity along with new launches next year.

- Norton strategy - Products plans are under consideration and will focus on both developed and developing markets. Norton will help elevate overall product positioning of TVS.

- Confident to achieve double digit margins backed by 1) volume recovery, 2) premium mix and 3) cost control. Consol profits to also improve backed by expected improvement in subs performance.

- Additional investment of Rs1-1.25b expected in TVS credit in rest of FY22 (v/s Rs0.5b invested in 1Q). It reported net loss of Rs250m with GNPA of 5.2% (v/s 5% in 4Q).

View - TVSL's 1Q profitability hit was led by negative op. leverage as only 40bp QoQ contraction in gross margins is commendable (v/s sharp contraction from peers) given steep RM inflation. TVSL's aggressive price hikes and premium focus to help margins expansion aided by underlying volume recovery. TVSL trades at 21x FY23 bloom EPS (v/s 17.x of BJAUT/ 13x HMCL/ 24x EIM). Not Rated.

Shares of TVS MOTOR COMPANY LTD. was last trading in BSE at Rs. 579.2 as compared to the previous close of Rs. 561.5. The total number of shares traded during the day was 327956 in over 8463 trades.

The stock hit an intraday high of Rs. 604.65 and intraday low of 564.85. The net turnover during the day was Rs. 192657420.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Automobile Sector - Monthly Quick View - Aug'21 - Mixed Performance across Segments - Reliance Securities

Axis Securities initiating coverage on ICICI Securities

Company Update - Minda Corporation - Q1FY22 - ICICI Direct

Quant Pick - PVR Ltd - ICICI Direct

Quant Pick - ONGC - ICICI Direct

Peak in the headline wholesale inflation is behind us - WPI August 2021 - Acuité Ratings

Sansera Engineering - IPO - Strong Outlook with Steady Cash Flow - Reliance Securities

APL Apollo Tubes - Journey from a semi-commodity player to a branded one - HDFC Securities

Nazara Technologies Ltd - Upbeat in medium-term, Uncertain over Long-term - YES Securities

IPO Review - Sansera Engineering Ltd - ICICI Direct

Overall index is still 0.3% lower than the pre-pandemic levels - IIP July 2021

YES SECURITIES on Monthly General Insurance & Mutual Funds Data

India urban logistics spaces expected to cross 7 million sq. ft by 2022: JLL

Neogen Chemicals - Breaking into the next orbit with a bang - HDFC Securities

Gladiator Stocks - Bharti Airtel Ltd - ICICI Direct

Gladiator Stocks - V-Guard - ICICI Direct

Balkrishna Industries - Industry export growth accelerates - ICICI Securities

HDFC Life Insurance - Exide Life Acquisition - Maintain ADD - YES Securities

Gladiator Stocks - Grindwell Norton - ICICI Direct

Gladiator Stocks - Godrej Properties - ICICI Direct

Monthly Auto Volumes - August 2021 - ICICI Direct

Stock Tales - Easy Trip Planners - ICICI Direct

IPO Review - Vijaya Diagnostic Centre Ltd - ICICI Direct

AU Small Finance Bank - Attrition at top level remains key challenge; business momentum sustained in Jul/Aug'21 - ICICI Securities

Gladiator Stocks - State Bank of India - ICICI Direct

Gladiator Stocks - PNC Infratech - ICICI Direct

Vijaya Diagnostic Centre Ltd - IPO Note - YES Securities

Consumer Durables Sector - Lockdown mars performance yet again - Institutional Research Desk at HDFC Securities

75% of the employees today want to be in office at least once a week as compared to 52% in October 2020: JLL

Gladiator Stocks - Safari Industries - ICICI Direct

Gladiator Stocks - Interglobe Aviation - ICICI Direct

IPO Review - Ami Organics Ltd - ICICI Direct

Q1FY22 GDP - 31st Aug 2021 - Acuité Ratings & Research

Avanti Feeds - Higher input prices hurt margins - ICICI Securities

Company Update - Restructuring - Aarti Industries - ICICI Direct

Q1FY22 Company Update - MM Forgings - ICICI Direct

Company Update - Arvind Fashions - ICICI Direct

Zomato - Can margins and multiples surprise? - ICICI Securities

Ujjivan Small Finance Bank - Top management change and lumpy provisioning concern to weigh on valuation in near term - ICICI Securities

Bharat Dynamics - Guided missile systems to drive orderbook and profit growth - ICICI Securities

Economy - Continued accommodation necessary despite inflationary risks: MPC minutes - ICICI Securities

InterGlobe Aviation - Annual report analysis: Liquidity management remains the mainstay in anticipation of traffic recovery - ICICI Securities

General insurance - Health remains dominant growth driver; Strong all-round performance by Bajaj Allianz - ICICI Securities

Earnings Wrap Q1FY22: Resilient earnings, limited impact of second Covid wave - ICICI Direct

Fine Organic Industries Results Review - In-line performance - HDFC Securities

Power Plus Sector Update - July witnessed strong ~10% generation growth - HDFC Securities

Information Technology Sector Update - 'Hit Refresh' - HDFC Securities

Maintain ADD on JK Cement - Healthy performance - HDFC Securities

Maintain BUY on Star Cement - Margin recovers on pricing gain - HDFC Securities

Maintain BUY on Sadbhav Engineering - Long road to recovery - HDFC Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020