Motilal Oswal's research report on TVS Motor
Demonetization slowed volume growth to 2.4% YoY (-12% QoQ) to 718.5k units. Growth of 4.6% YoY in domestic 2Ws was offset by a decline of 40% YoY in 3W exports. Realizations fell 1% QoQ (+0.7% YoY) to INR 41.5k due to higher share of mopeds. Net sales grew 3% YoY (-13% QoQ) to INR 29.8b.
Outlook
We lower our estimates for FY18 by 7%, mainly due to a cut in EBITDA on account of a) raw material cost pressures in FY18 and b) higher-than expected fixed costs. The stock trades at 26.1x/18.4x FY18E/19E EPS. Maintain Buy with a TP of INR 462 (18x FY19E EPS + INR 69/share for BMW alliance).
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