TVS Motor Share Price: Buy TVS Motor Company, Target Price Rs 776 : ICICI Securities
TVS Motor Company Ltd., incorporated in 1992, is a large capitalization company (having a market capitalization of Rs 30944.80 Crore) operating in the automotive sector.
Major products/revenue segments of TVS Motor Company Ltd. include automobile – 2 and 3 wheels, accessories and spare parts, other operating income, sale of services for the year ending March 31, 2021.
For the quarter ended 31-12-2021, the company reported consolidated total revenue of Rs 6606.22 Crore, up 1.77% from last quarter, total revenue of Rs 6491.18 Crore and up up 8.09% from the same quarter last year, total revenue of Rs 6111.56 Crore. The company reported a net profit after tax of Rs 231.46 Crore last quarter.
The brokerage believes that TVS Motors’ (TVSM) performance in Q3FY22 on the execution front was commendable – generating a 10% EBITDA margin (up about 50 basis points year-over-year) despite volumes down around 11% and unit cost of raw materials up around 19% year-on-year. EBITDA per unit increased by 25% YoY to Rs 6.5,000, driven by approximately 19% increase in ASP (due to mix and price increase of approximately 5% ), coupled with cost reduction exercises. TVSM’s diverse domestic portfolio, superior export mix and the success of recent 125cc launches demonstrate its ability to generate superior EBITDA growth. The brokerage firm believes the EV subsidiary would create opportunities to unlock potential value and grow the EV business, while Norton, the BMW combination and e-bike brands would help it achieve its global ambitions. Capital expenditure and investment of Rs 23 billion in FY22 would result in negative FCF and subsequent increase in debt.
The promoters held 52.26% of the company’s capital as of December 31, 2021, while the FIIs held 12.86% and the DIIs 25.46%.
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