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Last Updated : Jan 22, 2019 09:24 AM IST | Source:

TVS Motor Q3 preview: revenue growth expected to be strong, margin may take a hit

Volume increased 19.8% YoY (-9.1 percent QoQ). Scooter, motorcycle and mopeds volume increased YoY by 31.7 percent, 20.3 percent and 0.9 percent respectively. 3W volumes rose by 46.9 percent YoY.

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Two-and-three-wheeler maker TVS Motor Company is expected to report strong revenue growth driven by volumes but profit is likely to get impacted by operating margin in quarter-ended December 2018.

Analysts expect profit growth to be in the range of negative 2 percent to positive 10 percent as margin is likely to contract despite price hikes.

Emkay said, overall, adjusted profit is likely to fall 2 percent YoY (-29 percent QoQ), impacted by higher depreciation and tax rate while Motilal Oswal expects the same to grow by nearly 3 percent and Reliance Securities sees 10 percent growth in profit.


Operating profit (EBITDA - earnings before interest, tax, depreciation and amortisation) is expected to be strong at 15-36 percent growth YoY but margin may be flat to negative YoY.

"EBITDA margin should contract by 110 bps QoQ (-30bps YoY), despite price hikes and USD depreciation benefits owing to lower scale, commodity inflation and higher discounts, said Emkay, while Motilal Oswal expects margin to fall 10 bps YoY and 90 bps QoQ.

Analysts expect revenue growth to be very strong, more than 20 percent due to volume growth.

Volume increased 19.8 percent YoY (-9.1 percent QoQ). Scooter, motorcycle and mopeds volume increased YoY by 31.7 percent, 20.3 percent and 0.9 percent, respectively. 3-wheeler volumes rose 46.9 percent YoY.

Motilal Oswal expects revenue to grow 23.5 percent. Prabhudas Lilladher said with around 20 percent YoY volume growth and around 3 percent YoY realisation improvement (higher share of exports in the product mix), TVS Motor's Q3FY19 revenue is expected to grow around 23 percent YoY.

Net realisation is likely to increase 3.1 percent YoY (+0.2 percent QoQ) to Rs 45,995 per unit due to price hikes and better product mix, according to Motilal Oswal.

Key issues to watch out for

> Update on demand from rural and urban areas.

> Exports outlook for 2W and 3W in key markets.

> Response to newly launched Radeon.

> New product launches including EV.

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First Published on Jan 22, 2019 09:24 am
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