TVS Motor - Weak domestic performance; 3W grew stronger - ElaraCapital

- Overall sales for TVS de-grew by 6.2% YoY to a total of ~165K units, driven by continued tepid sales in domestic market. Although we expected MoM pickup in May'13 (similar to other 2W players) on account of onset of marriage season and improved farm income

- Bike sales were supported by newly launched Phoenix 125 (as also seen in the past few months trend), however in domestic 2W sales in May'13 fell by 8% YoY and 2% MoM, indicating stabilizing sales

- Among all segments, scooters continued to remain the worst hit by growing competition from HMSI and Hero, with sales falling by 13% YoY in May'13. However on a sequential basis, scooter run-rate improved by 14% MoM, which is a positive move as the Company has been losing market share in Scooter segment

- Moped sales fell further this month by 16% YoY and 6% MoM to ~59K units

- The key positive continues to be the offlate improvement in TVS Motor's 3W sales which grew significantly by 99% YoY to 5,805 units in May'13

- 3W share to total sale stood at 3.5%, up from 1.7% last year and 2.4% in FY13

Our view: The growth in FY14 stands at minus 5.7%, which is likely to improve further in FY14E on the back of pick up in new Phoenix 125 and expected refreshes in scooter segments. Maintain accumulate on cheap valuation and likely recovery in volume growth by H1FY14E.

Source : Equity Bulls

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