TVS Motor Q3 Results: Strong operational performance sends shares higher by 5%

TVS Motor Company Ltd. reported results that were in-line or above analyst expectations on most fronts on Tuesday, January 28. The stock surged in response to the results.

Net profit for the period stood at ₹618 crore, which was 4% higher than the same quarter last year, and marginally below the CNBC-TV18 poll of ₹657 crore.

Revenue for the quarter also increased by 10.3% from the year-ago quarter to ₹9,097 crore. A CNBC-TV18 poll had projected the figure at ₹9,135 crore.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the company increased by 17% on a year-on-year basis to ₹1,081 crore, which was in-line with expectations of ₹1,061 crore, while margins expanded by 70 basis points to 11.9% from 11.2% earlier.
The EBITDA margin figure for TVS Motor was also 30 basis points higher than the CNBC-TV18 estimate of 11.6%.

On a consolidated basis, the revenue of all of TVS Motor’s segments – Automotive Vehicles and Parts, Automotive Components and Financial Services saw an increase on a year-on-year basis.

Volumes for the quarter have increased by 10% on a year-on-year basis, while Electric Scooter sales went up by 57% from last year.

Some of the positives during the quarter include:

• Revenue growth was volume-led
• A sharp drop in Raw Material Cost to Sales
• EBITDA per Vehicle is healthy

However, some of the negatives during the quarter include: 

• Realisations were in-line with expectations but remain flat
• The low-margin electric two-wheeler sales increased by 57% from last year
• High-margin electric three-wheeler sales declined by 24% from last year

Shares of TVS Motor surged 4.5% post the results announcement to ₹2,330. As of Monday’s closing, the stock was down 25% from its recent peak of ₹2,958.