TVS Motor Company Ltd.|Q2FY15 Result Update | Operating margin in line with estimates | CMP : Rs.242 | Reco : SELL | Target : Rs.146 :: IndiaNivesh

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TVS Motors reported Q2FY15 results were in line with our estimates. Revenue
increased by 34.3% YoY and 16.4% QoQ to Rs 26.3bn (in line our expectation
of Rs. 26.1 bn) due to 34.8% increase in volume, though, partially offset by
0.4% YoY decrease in average realization.
 Total volume increased by 34.8% YoY to Rs 0.67 mn unit on the back of 24%
increase in 3W sales, 29% increase in Motorcycle sales, and 68% growth in
Scooter sales. Export sales volume increased by 29% YoY and domestic volume
increased by 36.0% YoY. During this quarter, the company strengthened its
scooter portfolio with the launch of TVS Scooty Zest 110. TVS Jupiter and TVS
StaR City + launched earlier continued its upward trend.
 EBITDA margin expanded by 17bps YoY to 6.1% due to decline in other
expenditure and employee cost, partially offset by higher raw material cost.
Other expenditure (as % of sales) was down 189 bps YoY to 15.4% (v/s 17.2%
in Q2FY14) while RM cost (as % of sales) was up 231 bps YoY to 74.4% (v/s
72.1% in Q2FY14). Reported PAT was up by 6.7% YoY at Rs 948 mn, vs our
expectation of Rs. 924 mn due to higher operating income.
Operating margin in line with estimates
Con-call update
 TVS Motor had successfully launch its new two-wheeler scooter Zest in August.
The company will also launch a motorcycle each in the third and fourth quarter
of the current financial year.
 The company plans to achieve a market-share of 14% in 2W segment during
the current fiscal. During Q2FY15, TVS domestic market share in 2W increased
to 12.6% v/s 12.0% in Q2FY14.

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