TVS Motor Q1 Review - Weak Quarter; Electric Vehicle Risk Looms: Systematix
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Systematix Research Report
TVS Motor Company Ltd.'s Q1 FY22 Ebitda margin at 7% was below consensus and our estimates as operating deleverage hurt margins.
The company could offset raw material inflation better than peers through price hikes, product mix improvement and cost rationalisation measures.
The management indicated that demand has started to recover to pre-lockdown levels with the easing of regional lockdowns.
On the electric vehicles front, the company has announced investments of Rs 3 billion in the current year towards product development and capacity expansion (currently 120,000 units per annum); delay in launching products (especially in the mass market segment) can hurt its volume growth.
The exports (30% of sales) momentum remains strong and TVS Motor expects demand to outperform domestic sales.
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