TVS Motor Company (TVSL) is a reputed two and three-wheeler manufacturer globally, championing progress through Sustainable Mobility with four state-of-the-art manufacturing facilities in Hosur, Mysuru, and Nalagarh in India and Karawang in Indonesia. Its products lead in their respective categories in the J.D. Power IQS and APEAL surveys. Its group company Norton Motorcycles, based in the United Kingdom, is one of the most emotive motorcycle brands in the world. The company’s subsidiaries in the personal e-mobility space, Swiss E-Mobility Group (SEMG), and EGO Movement have a leading position in the e-bike market in Switzerland. TVS Motor Company endeavors to deliver the most superior customer experience across the 80 countries in which it operates.

Result Analysis: TVS Motors Company Limited (CMP: Rs. 1306.50) Result Update: Q1FY24

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    Stock Details
    Market Cap. (Cr.) 62071.82
    Equity (Cr.) 47.51
    Face Value 1
    52 Wk. high/low 1385 / 837
    BSE Code 532343
    Book Value (Rs) 115.87
    Sector Automobiles
    Key Ratios
    Debt-Equity: 3.86
    ROCE (%): 13.59
    ROE (%): 26.44
    TTM EPS: 30.69
    P/BV: 11.28
    TTM P/E: 42.57

    Result Highlights:

    • TVSL reported a robust growth in revenue of 23.8% YoY, and 12.8% on sequential basis which was mainly driven by ~5% YoY growth in volumes and ~14% YoY growth in ASP to INR 75.7k per unit.

    • The company reported a record EBITDA of Rs.1,215cr., 13.4% EBITDA margin (+30 bps QoQ; consistent). Commodity prices are anticipated to stay favourable for the upcoming quarters, and as a result, operational leverage advantages and price increases will increase EBITDA margin.

    • PAT was lower by 14% QoQ and 5% YoY basis due to high finance cost, depreciation, and transition to new tax regime.

    • Domestically, TVSL anticipates significant growth in urban markets, but only modest development in rural areas. The delayed monsoon was first concerning, but it now looks usual. The government’s support for high MSP would help the buying mentality in rural regions, as will an equitable distribution of rainfall. The firm increased its market share in the 2W area by 225bps, to 17.42%, driven by a 447bps growth in the motorcycle category.

    • The prognosis for exports remains unclear owing to currency depreciation. However, MoM, retail sales continue to rise. The business keeps its distributor-level inventories at 30-35 days. The majority of the channel destocking has already been completed, and exports are anticipated to increase starting in H2FY24. Export revenue were Rs 16.65 billion, realizing Rs 82 per USD.

    • In the EV segment the industry demand was harmed by the FAME (Faster Adoption and Manufacturing of Electric Vehicles) subsidy decrease in June 23; however, demand started to rebound a little in July 23. Demand is projected to return to normal by 2HFY24. It is increasing iQube production and anticipates attaining a monthly output of about 25k devices. Even with the FAME subsidy decrease and goodwill return (which absorbed negative impacts of 0.2-0.3% against revenue for 30k bookings), the contribution margin in the EV industry is still positive.

    • Company also expects to introduce new EVs in the 5-25kW class in the upcoming months, while the introduction of the e3W is anticipated for H1FY24.

    • Over and beyond the investment objective of Rs8.5-9b (including Rs4b in 1QFY24), Capex is targeted at Rs9-10b (including EV).

    • The cost of debt increased by 0.3%, driving the increase in interest rates, while borrowings also increased by Rs2.5b.

    Financial Performance:Financial-Performance-tvsShareholding Pattern:

    Particulars (In%) Q1FY23 Q1FY24
    Promoters Group 50.81 50.27
    FIIs 10.18 18.45
    DIIs 30.74 23.42
    Public 7.76 7.37
    Others 0.51 0.49


    TVSL reported inline operating performance. Realizations grew at Rs75.7k/unit for the fifth straight quarter as price increases took the lead. As EV share is projected to rise in the future, QoQ margin improvement will be dependent on RM softening and operating leverage. Price increases persisted with an increase of 0.5% in Q2FY24, 0.8% to 1.0% in May’23, and 1.0% to 1.1% in Q1FY24. Management reiterated EV releases in the future (in the 2W and 3W sectors, with a capacity of 5 to 25 kwh). TVSL is in a better position than other 2W OEMs in both ICE and EVs due to higher product acceptance, which could lead to additional market share increases. TVSL stated that volumes will return to normal by Q3 or Q4 following the latest FAME 2 subsidy cutbacks in EVs.


    Particulars (In Rs. Cr.) Q1FY24 Q4FY23 Q1FY23 QoQ% YoY%
    Revenue from Operations 9,056 8,031 7,316 12.8% 23.8%
    Other Income 87 67 32 28.9% 169.3%
    Total Income 9,142 8,099 7,348 12.9% 24.4%
    Cost of materials consumed 5,501 4,946 4,614 11.2% 19.2%
    Purchase of Stock-in-Trade 460 136 219 236.9% 110.1%
    Changes in inventories -272 18 19
    Employee expense 821 762 659 7.7% 24.6%
    Other Expense 1,332 1,114 900 19.5% 48.1%
    EBITDA 1,215 1,054 905 15.2% 34.2%
    EBITDA Margin (%) 13.4% 13.1% 12.4% 30 bps 100 bps
    Finance Cost 437 398 292 9.7% 49.7%
    Depreciation & Amortisation expense 227 232 199 -2.1% 14.1%
    Profit Before Tax (PBT) 637 491 447 29.8% 42.7%
    Tax 185 151 139 22.7% 32.9%
    Exceptional Items-incomes/expenditure -11 -4 11 138.1% -200.6%
    Profit After Tax (PAT) 441 336 318 31.5% 38.8%
    PAT Margin (%) 4.9% 4.2% 4.3% 70 bps 60 bps
    EPS (in Rs.) 9.14 7.07 6.43 29.3% 42.1%
    Segment Revenue (In Rs. Cr.) Q1FY24 Revenue % Q4FY23 QoQ% Q1FY23 YoY%
    Automotive Vehicles & Parts 7,614 83.2% 6,704 13.57% 6,328 20.32%
    Automotive Components 189 2.1% 192 -1.98% 204 -7.37%
    Financial services 1,351 14.8% 1,235 9.37% 867 55.85%
    Others 0.02 0.0% 0.01 100.00% 3.77 -99.47%
    Total 9,153 100.0% 8,132 12.56% 7,402 23.66%
    Source: Company website, EWL Research

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