TVS Motor Q2 Review - To Outpace Industry Growth: Prabhudas Lilladher
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Prabhudas Lilladher Report
TVS Motor Company Ltd. posted its highest ever quarterly revenue of Rs 56 billion despite challenging environment. Its Q2 FY22 Ebitda margin at 10% (+70bps YoY) surprised positively, as the company was able to deliver highest ever quarterly revenue and Ebitda amidst challenging demand environment (subdued festive season) and rising commodity cost pressures.
The growth was driven by premiumisation, higher exports and price hikes. TVSL’s product pipeline also remains strong with Ntorq, Jupiter125, Apache, Raider etc. gaining traction.
Earlier, the management had announced Rs 10 billion investment towards development of EV product portfolio and incrementally a new subsidiary will be created for EV focused products and technologies.
We maintain our positive stance on TVS as
(i) new product launches will aid in increasing volumes
(ii) with countries now opening up, exports are likely to improve
(iii) receding fear of 3rd wave in India can possibly lead to pent-up demand in upcoming quarters and
(iv) cost reduction efforts and price hikes will aid in protection of margins.
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