Highest ever monthly sales – Three-wheelers (on a low
base) and scooters are its fastest growing segments. For
Sep ‘10, TVS Motor reported volume growth of 30.8% yoy
and 10.1% mom to 188,005 units (in line with our
expectations). Volume was driven by three-wheelers
(168.5% yoy, but on a lower base and -11.1% mom) and
scooters (43.7% yoy, 5.3% mom). The company is in the
process of increasing capacity across segments and
expects to reach 200,000 units/month by Jan-Feb 2011.
Motorcycle volume grows 34% yoy – Motorcycle volume
increased 34% yoy and 22% mom to 81,381 units. Moped
sales also reported good sales, growing 16.3% yoy (but
lower 1.2% mom).
Three-wheelers growth impressive – Three-wheeler
volume increased 168.5% yoy but declined 11.1% mom to
3,222 units.
Exports continue to grow yoy – Exports increased 88.5%
yoy (flat mom) to 19,365 units, marking the tenth
consecutive month of yoy volume growth for TVS Motor’s
exports.
Valuation – YTD volume growth is healthy at 33.1% yoy
with residual growth at 18.8%. The company’s latest
offerings Jive and Wego are doing well. TVS is also reintroducing
the twin-spark Flame to capture the festival
season demand. However, we believe that current
valuations are rich compared to other two-wheeler
companies. Maintain Underperform.
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