Fundamental Result Update

TVS Motor - Q1FY18 Results



TVS Motor’s (TVSL) Q1FY18 performance was disappointing as it reported subdued financials on all the parameters, primarily impacted by one time dealer compensation on old inventory and discontinuation of excise benefit from HP plant. During the quarter the company recorded total sales of 8.02 lakh units.

TVSL’s PAT stood at Rs. 130cr in Q1FY18, up 7% YoY and 2.4% QoQ. Its profit was boosted up by higher non operating income of Rs 57.1 cr (up 57.8% YoY), due to onetime government’s grant of Rs 9.67cr. Its depreciation was higher by 18.8% YoY to Rs 78 cr due to new accounting standard. Its tax rate stood at 27.8%, increased by 113% YoY and 414% QoQ, due to discontinuation of tax benefit from HP plant and reduction of tax benefit on R&D. TVSL’s EPS was at Rs. 2.73 in Q1FY18.

Valuation: Scooter portfolio stands well positioned however, considering 3 wheeler exports our view on stock remain cautious, the stock at Rs. 585 trades at 35.8x of our estimated FY19 EPS of Rs 16.3 per share. We have assigned a price target of Rs 538 per share based on PE of 33x its FY19 estimates. We recommend ‘Reduce rating on the stock


Tags: FundamentalResult Update TVS Motor


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