TVS Motor Ltd. In line, Maintain Accumulate :Emkay

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TVS Motor Ltd.

In line, Maintain Accumulate

ACCUMULATE

CMP: Rs49                                        Target Price: Rs62

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n     APAT at Rs 588mn in line with our est. Strong top line of Rs 17.5bn (~4% above est.) was offset by weaker margins of 6.7%(est. 6.9%) leading to inline EBITDA (Rs 1.1bn)

n     Exports/mopeds/scooters continue to see momentum. However, concerned with sharp drop in domestic 3-wh (down 56%YoY in 1QFY12)

n     Lower our FY12/13 by 0.4%/3% due to lower dom. 3 wh sales.  Concerns with conso BS continues.  Net DE/PBV/RONW at 1.16x/3.4x/ 18.7% vs 0.56x/2.33x/19.5% for standalone (FY11)

n     Further invested Rs 225/349 mn in Indonesian/European sub.  Retain ACCUMULATE rating with a revised TP of Rs 62 due to downgrade in multiple (balance sheet concerns)