TVS Motor Ltd. Below expectations, Maintain Accumulate : Emkay

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TVS Motor Ltd.

Below expectations, Maintain Accumulate

ACCUMULATE

CMP: Rs 56                                       Target Price: Rs 72

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n     Results below est. with APAT at Rs 479mn (est. of Rs 594mn) due to below est. topline at Rs 16.4bn (est of Rs 17.1bn), lower other income and higher tax rate

n     Despite better product mix and price hikes, ASP was flat QoQ. TVS invested Rs 718mn/ Rs 2.4bn during 4Q/FY11 in PT TVS Motor- Indonesia, TVS Energy and TVS Motor Services

n     Lower our FY12 EPS by 11% to Rs 5.3 per share. Introduce our FY13 est. with volumes of 2.59mn units and EPS (standalone) of Rs 6.4 per share

n     Retain ACCUMULATE rating with a target of Rs 72 (PER/EV-EBIDTA of 11.2x/6.8x our FY13 est.). Key risk – sharp jump in metal prices/demand slowdown and losses in Indonesia