TVS Motor beats street; Q4 net up 30% YoY to Rs 57 crore

Two-wheeler maker TVS Motor 's fourth quarter net profit rose better-than-expected 30% from a year ago to Rs 57 crore as slightly lower net sales were offset by higher other income and lower expenses.

The company's quarterly net sales were down 0.4% at Rs 1603 crore.

Analysts on average had expected net profit at Rs 48 crore on revenue of Rs 1,730 crore, according to a CNBC-TV18 poll.

TVS Motor's input costs in Jan-March fell 1.2% to Rs 1,170 crore and tax expenses also declined to Rs 5 crore from Rs 16 crore.

It also had other income of Rs 8 crore in the fourth quarter.

Ronak Sarda, analyst at MSFL, said earnings beat expectations as lower taxes benefited. However, EBITDA margin at 6.5% down 30 bps year-on-year was a disappointment.

TVS Motor's sales volumes last financial year rose 7% from a year ago to 21.89 lakh units. While its motorcycle sales rose 1.4% to 8.45 lakh units, scooter sales were up 13% to 5.25 lakh units, last year. The company's moped sales were up 10.5% to 7.79 lakh units and three-wheeler sales rose by 1,000 units to 40,000. Its exports accelerated 23% to 2.96 lakh units.

Total two-wheeler industry sales in India grew near 15% to 1.34 crore units last year, according to Society of Indian Auto Makers.

ROAD AHEAD

TVS Motor sales may have lagged the industry last year, but it aims to grow at a faster clip this year, helped by several new models it plans to launch in the market, apart from upgrading several of its existing models.

The company expects the two-wheeler industry will grow 10% this year, and it hopes to grow ahead of the industry. SIAM has forecast 11-13% growth for the two-wheeler industry in the current financial year.

TVS Motor recently launched the 2012 series of the Apache RTR motorcycle. It will launch a new executive segment motorcycle in August and another motorcycle and a new scooter will be launched in the last quarter (Jan-March).

"We believe valuations are factoring the worst given TVS' decent product portfolio, new launch in executive segment, exposure to growing export markets, in house R&D support & large distributorship," Sarda of MSFL said.

He has a "buy" on the stock with a target of Rs 63.

TVS Motor shares ended up 1.1% at Rs 33.35 on NSE on Thursday.