TVS Motor Q2 Review - Strong Quarter, Encouraging Outlook; Upgrade To Buy: Axis Securities
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Axis Securities Report
TVS Motor Company Ltd posted a robust set of numbers for the quarter with the company’s performance ahead of our expectations.
Its total export of two-wheelers and three-wheelers registered a growth of 46% YoY to 3.15 lakh units in Q2FY22, offsetting a decline of 8% in domestic sales (6 lakh units).
The demand in the export markets continues to be robust. TVSL's revenue for the quarter stood at Rs 5,619 crore (our estimate - Rs 5,497 crore) as compared to Rs 4,605 crore in Q2FY21, reporting a growth of 22% YoY. This was on account of ~6% growth in volumes and a 15.5% YoY increase in ASPs.
Reported Ebitda came in at Rs 563 crore, a 31% YoY increase (our estimate - Rs 512 crore). TVSL reported an Ebitda margin of 10%, a 68bps YoY expansion (our estimate – 9.3%).
The company was able to achieve the same despite various challenges in terms of increase in commodity costs, scarcity of containers for international business, and shortage in semiconductors through significant cost reduction initiatives and strong growth in revenues.
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