TVS Motor Company ACCUMULATE€¦ · TVS Motor Company (TVSL) reported better-than-expected results for 1QFY2013 led by higher-than-expected volumes and stronger-than-expected net

Please refer to important disclosures at the end of this report 1

Quarterly highlights (Standalone) Y/E March (` cr) 1QFY13 1QFY12 % chg (yoy) 4QFY12 % chg (qoq)

Net Sales 1,820 1,746 4.2 1,627 11.8

EBITDA 108 117 (8.2) 99 8.7

Adj. EBITDA margin (%) 5.9 6.7 (80)bp 6.1 (17)bp

Adj. PAT 51 59 (13.1) 57 (10.7)

Source: Company, Angel Research

TVS Motor Company (TVSL) reported better-than-expected results for 1QFY2013 led by higher-than-expected volumes and stronger-than-expected net average realization. Going ahead, we expect a challenging environment for the company due to rising competition in the two-wheeler sector amidst moderation in demand. However, we believe that the upcoming launches, new motorcycle in the executive segment in 2QFY2013 and new scooter in 4QFY2013 will be the key for the company to regain volume momentum going ahead. Due to attractive valuations, we recommend Accumulate on the stock.

Better-than-expected performance for 1QFY2013: TVSL reported net sales growth of 4.2% yoy (11.8% qoq) to `1,820cr (better than our estimates) aided by upward revision in volumes by 5.4% and also due to strong growth in net average realization (up 8% yoy). Total volumes reported a decline of 3.0% yoy (1.7% qoq) led by 10.1% and 4.0% yoy decline in motorcycle and scooter volumes, respectively. EBITDA margin came in-line with our estimates at 5.9%, showing a decline of 80bp yoy (flat qoq) due to increase in other expenditure. Other expenditure jumped 210bp yoy primarily due to increase in advertising spends on key brands like Wego, Star City, Sport and recently introduced Apache and Scooty Pep. Net profit registered a decline of 13.1% yoy (down 10.7% qoq) to `51cr. Net profit was 14.2% above our estimates due to higher-than-expected top-line.

Outlook and valuation: We have tweaked our volume estimates slightly and model volume growth of 3.2%/6.9% for FY2013E/14E, respectively. Going forward, we expect operating margins to remain under pressure due to rising competition in the two-wheeler sector leading to increase in advertising spends. Nonetheless, at `38, TVSL is trading at attractive valuations of 7.1x FY2014E EPS. We recommend Accumulate rating on the stock with a target price of `43.

Key financials (Standalone) Y/E March (` cr) FY2011 FY2012 FY2013E FY2014E

Net Sales 6,288 7,126 7,545 8,301

% chg 41.9 13.3 5.9 10.0

Net Profit 206 249 234 255

% chg 71.8 20.9 (5.9) 8.9

EBITDA (%) 6.2 6.6 6.2 6.1

EPS (`) 4.3 5.2 4.9 5.4

P/E (x) 8.8 7.3 7.8 7.1

P/BV (x) 1.8 1.6 1.4 1.2

RoE (%) 22.1 23.0 18.8 18.1

RoCE (%) 15.2 18.5 16.3 16.3

EV/Sales (x) 0.3 0.2 0.2 0.2

EV/EBITDA (x) 4.6 3.4 3.4 3.0 Source: Company, Angel Research

ACCUMULATE CMP `38 Target Price `43

Investment Period 12 Months

Stock Info

Sector

Bloomberg Code

Shareholding Pattern (%)

Promoters 59.3

MF / Banks / Indian Fls 20.1

FII / NRIs / OCBs 2.8

Indian Public / Others 17.8

Abs. (%) 3m 1yr 3yr

Sensex (0.3) (5.8) 11.4

TVS Motor (6.5) (22.3) 21.4

Automobile

Avg. Daily Volume

Market Cap (` cr)

Beta

52 Week High / Low

Net Debt (` cr) 391

Face Value (`)

BSE Sensex

Nifty

Reuters Code

1.0

17,144

5,200

TVSM.BO

TVSL@IN

1,822

1.1

70/32

401,053

Yaresh Kothari 022-3935 7800 Ext: 6844

[email protected]

TVS Motor Company Performance Highlights

1QFY2013 Result Update | Automobile

July 30, 2012

TVS Motor Company | 1QFY2013 Result Update

July 30, 2012

2

Exhibit 1: Quarterly financial performance (Standalone) Y/E March (` cr) 1QFY13 1QFY12 % chg (yoy) 4QFY12 % chg (qoq) FY2012 FY2011 % chg (yoy)

Net Sales 1,820 1,746 4.2 1,627 11.8 7,126 6,288 13.3

Consumption of RM 1,304 1,281 1.8 1,152 13.2 5,117 4,507 13.5

(% of Sales) 71.7 73.3 70.8 71.8 71.7 Staff Costs 102 91 12.6 95 7.9 370 327 13.3

(% of Sales) 5.6 5.2 5.8 5.2 5.2 Purchase of goods 32 32 1.3 37 (11.8) 144 107 34.3

(% of Sales) 1.8 1.8 2.3 2.0 1.7 Other Expenses 274 225 21.4 244 11.9 1,026 955 7.4

(% of Sales) 15.0 12.9 15.0 14.4 15.2 Total Expenditure 1,712 1,629 5.1 1,528 12.0 6,657 5,896 12.9

Operating Profit 108 117 (8.2) 99 8.7 469 392 19.7

OPM (%) 5.9 6.7 6.1 6.6 6.2 Interest 15 15 2.0 13 16.2 57 72 (21.1)

Depreciation 31 28 11.8 32 (2.4) 118 107 9.6

Other Income 5 4 40.3 8 (39) 22 36 (39.1)

PBT (excl. Extr. Items) 66 78 (15.1) 62 6.3 316 248 27.6

Extr. Income/(Expense) - - - - - - - -

PBT (incl. Extr. Items) 66 78 (15.1) 62 6.3 316 248 27.6

(% of Sales) 3.6 4.5 3.8 4.4 3.9 Provision for Taxation 15 19 (21.2) 5 203.2 67 54 25.9

(% of PBT) 22.7 24.5 8.0 185.2 21.3 21.6 Reported PAT 51 59 (13.1) 57 (10.7) 249 195 28.0

Adj PAT 51 59 (13.1) 57 (10.7) 249 195 28.0

Adj. PATM 2.8 3.4 3.5 3.5 3.1 Equity capital (cr) 47.5 47.5 47.5 47.5 47.5 Reported EPS (`) 1.1 1.2 (13.1) 1.2 (10.7) 5.2 4.1 28.0


Exhibit 2: 1QFY2013 – Actual vs. Angel estimates Y/E March (` cr) Actual Estimates Variation (%)

Net Sales 1,820 1,585 14.8

EBITDA 108 93 15.8

EBITDA margin (%) 5.9 5.9 5bp

Adj. PAT 51 45 14.2



July 30, 2012

3

Exhibit 3: Quarterly volume performance

(unit) 1QFY13 1QFY12 % chg (yoy) 4QFY12 % chg (qoq) FY2012 FY2011 % chg (yoy)

Total volumes 528,099 519,514 1.7 527,700 0.1 2,196,138 2,032,410 8.1

Domestic 470,839 448,813 4.9 460,795 2.2 1,909,672 1,787,313 6.8

Exports 57,260 70,701 (19.0) 66,905 (14.4) 286,466 245,097 16.9

Motorcycles Domestic 148,552 160,790 (7.6) 142,516 4.2 621,738 632,150 (1.6)

Exports 46,069 58,035 (20.6) 50,430 (8.6) 219,624 204,681 7.3

Total motorcycles 194,621 218,825 (11.1) 192,946 0.9 841,362 836,831 0.5

Scooters Domestic 111,221 105,180 5.7 128,052 (13.1) 496,896 435,388 14.1

Exports 6,336 4,288 47.8 8,498 (25.4) 32,199 16,618 93.8

Total scooters 117,557 109,468 7.4 136,550 (13.9) 529,095 452,006 17.1

Mopeds

Domestic 206,863 177,782 16.4 186,472 10.9 776,866 697,418 11.4

Exports 1,341 1,373 (2.3) 2,796 (52.0) 9,076 6,295 44.2

Total mopeds 208,204 179,155 16.2 189,268 10.0 785,942 703,713 11.7

Three-wheelers

Domestic 4,203 5,061 (17.0) 3,755 11.9 14,172 22,357 (36.6)

Exports 3,514 7,005 (49.8) 5,181 (32.2) 25,567 17,503 46.1

Total three-wheelers 7,717 12,066 (36.0) 8,936 (13.6) 39,739 39,860 (0.3)


Better-than-expected top-line growth: TVSL reported net sales growth of 4.2% yoy (11.8% qoq) to `1,820cr (higher than our estimate of `1,585cr) mainly on account of upward revision in volumes by 5.4% and also due to strong growth in net average realization (up 8% yoy). Volume for 1QFY2013 (as per SIAM) witnessed a decline of 3.0% yoy (1.7% qoq) led by 10.1% and 4.0% yoy decline in motorcycle and scooter volumes, respectively. Two-wheeler demand off-late has witnessed moderation in growth and increase in competitive activity which has resulted in poor performance by TVSL. Management clarified that there is a difference in accounting treatment for monthly and quarterly volumes. For sales outside Tamil Nadu, especially in the North, TVSL bills vehicles to its subsidiary Sundaram Auto Components (SACL), which in turn sells vehicles to dealers. For monthly volumes, TVSL reports sales to dealers and by SACL to dealers. However, for quarterly volumes, sales by TVSL to SACL and to dealers is reported and hence the difference.


July 30, 2012

4

Exhibit 4: Total volumes decline 3.0% yoy


Exhibit 5: Strong growth in net average realization


Exhibit 6: Better-than-expected top-line growth


Exhibit 7: Domestic market share trend

Source: Company, SIAM, Angel Research

EBITDA margin at 5.9%: TVSL’s EBITDA margin came in-line with our estimates at 5.9%, showing a decline of 80bp yoy (flat qoq) largely due to increase in other expenditure. Other expenditure jumped 210bp yoy primarily due to increase in advertising spends on key brands like Wego, Star City, Sport and recently introduced Apache and Scooty Pep. Raw-material expenses on the other hand witnessed a decline of 180bp yoy (flat sequentially) during the quarter. Operating profit declined 8.2% yoy (up 8.7% qoq) to `108cr.

32.8 33.4

39.9

24.0

15.3 15.1

0.7 1.7 (3.0)

(10.0)(5.0)0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

1QFY

11

2QFY

11

3QFY

11

4QFY

11

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

(%)(units) Total volume yoy growth (RHS)

29,527 30,285 30,781 30,968 31,911 32,309 32,808 30,352 34,502

5.7 6.8

7.6 8.9

8.1 6.7 6.6

(2.0)

8.1

(4.0)

(2.0)

0.0

2.0

4.0

6.0

8.0

10.0

27,000

28,000

29,000

30,000

31,000

32,000

33,000

34,000

35,000

1QFY

11

2QFY

11

3QFY

11

4QFY

11

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

(%)(`) Net average realization yoy growth (RHS)

1,393 1,616 1,647 1,635 1,746 1,992 1,761 1,627 1,820

40.9 43.0

51.1

34.5 25.3 23.2

6.9 (0.5)

4.2

(10.0)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

0

500

1,000

1,500

2,000

2,500

1QFY

11

2QFY

11

3QFY

11

4QFY

11

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

(%)(` cr) Net sales (LHS) Net sales growth (RHS)

19.6 21.6 21.9 21.3 20.5

22.8 19.4

15.4 15.3

7.3 7.1 6.9 6.8 6.3 6.8 5.6 5.9 5.4

5.6 4.5 3.7 3.5

2.3 2.6 2.8 3.2 2.9

14.7 15.4 15.1

14.7 14.3 15.2

13.4 13.6 12.8

0.0

5.0

10.0

15.0

20.0

25.0 1Q

FY11

2QFY

11

3QFY

11

4QFY

11

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

(%) Scooters Motor Cycles

Three Wheelers Total Two Wheelers


July 30, 2012

5

Exhibit 8: EBITDA margin at 5.9%


Exhibit 9: Net profit down 13.1% yoy


Net profit down 13.1% yoy: TVSL reported a 13.1% yoy (10.7% qoq) decline in its net profit to `51cr; however, it was 14.2% ahead of our estimates largely due to better-than-expected growth in top-line. The bottom-line benefited from slightly lower tax-rate (at 22.7% as against 24.5% in 1QFY2012) and increase in other income (up 40.3% yoy to `5cr).

6.4 6.7 6.1 5.9 6.7 6.9 6.5 6.1 5.9

74.0 73.7 74.7 74.6 76.9 75.5 73.9 74.2 74.6

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

1QFY

11

2QFY

11

3QFY

11

4QFY

11

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

(%) EBITDA margin Raw material cost/sales

40 55 56 44 59 77 57 57 51

2.9 3.4 3.4

2.7

3.4 3.8

3.2 3.5

2.8

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0

10

20

30

40

50

60

70

80

90

1QFY

11

2QFY

11

3QFY

11

4QFY

11

1QFY

12

2QFY

12

3QFY

12

4QFY

12

1QFY

13

(%)(` cr) Net profit (LHS) Net profit margin (RHS)


July 30, 2012

6

Investment arguments

Success of new launches key to volume growth: TVSL posted healthy 8.1% yoy growth in its volumes in FY2012 amidst slowdown in two-wheeler demand and rising competitive intensity in the sector. TVSL is in the process of launching two new models in FY2013 (new executive segment bike in 2QFY2013 and a new scooter in 4QFY2013), and we believe the success of these new models is key for the company to register volume growth going ahead. We expect the new launches to enable TVSL to ramp up its monthly run rate of two-wheelers and post annual volumes of 2.27mn and 2.42mn units in FY2013E and FY2014E, respectively, from 2.20mn units in FY2012.

Adverse product mix to weaken margins: Declining contribution of

three-wheelers and scooters in the overall product mix coupled with rising

competition is likely to pressurize the company’s operating margin going

ahead. Nonetheless, weakening of commodity prices will provide some

comfort on the margin front. We expect the company’s margin to decline by

~40bp in FY2013.

Outlook and valuation

Going ahead, we expect a challenging environment for the company due to rising competition in the two-wheeler sector amidst moderation in demand. We believe that the upcoming launches, new motorcycle in the executive segment in 2QFY2013 and new scooter in 4QFY2013 will be the key for the company to regain volume momentum going ahead. We have tweaked our volume estimates slightly and model volume growth of 3.2%/6.9% for FY2013E/14E, respectively. We expect operating margins to remain under pressure due to rising competition in the two-wheeler sector leading to increase in advertising spends.

Exhibit 10: Change in estimates Y/E March Earlier Estimates Revised Estimates % chg

FY2013E FY2014E FY2013E FY2014E FY2013E FY2014E

Net Sales (` cr) 7,442 8,198 7,545 8,301 1.4 1.3

OPM (%) 6.2 6.1 6.2 6.1 - -

EPS (`) 4.8 5.2 4.9 5.4 3.6 2.5


At `38, TVSL is trading at attractive valuations of 7.1x FY2014E earnings. We recommend Accumulate rating on the stock with a target price of `43 valuing the stock at 8.0x FY2014E earnings.


July 30, 2012

7

Exhibit 11: Key assumptions Y/E March FY09 FY10 FY11 FY12 FY13E FY14E

Total volume (units) 1,321,534 1,536,895 2,032,404 2,196,138 2,266,654 2,422,118

Motorcycles 634,918 640,965 836,821 841,362 824,535 865,761

Scooters 246,153 309,501 452,006 529,095 555,550 599,994

Mopeds 435,589 571,563 703,717 785,942 848,817 916,723

Three-Wheelers 4,874 14,866 39,860 39,739 37,752 39,640

Change yoy (%) 3.8 16.3 32.2 8.1 3.2 6.9

Motorcycles 6.2 1.0 30.6 0.5 (2.0) 5.0

Scooters (6.9) 25.7 46.0 17.1 5.0 8.0

Mopeds 5.9 31.2 23.1 11.7 8.0 8.0

Three-Wheelers 3,707.8 205.0 168.1 (0.3) (5.0) 5.0

Domestic (units) 1,128,136 1,371,481 1,797,993 1,909,672 1,960,656 2,083,021

Exports (units) 193,398 165,414 234,411 286,466 305,998 339,096


Exhibit 12: Angel vs. consensus forecast

Angel estimates Consensus Variation (%)

FY13E FY14E FY13E FY14E FY13E FY14E

Total op. income (` cr) 7,545 8,301 7,717 8,499 (2.2) (2.3)

EPS (`) 4.9 5.4 5.2 6.0 (5.2) (10.5)

Source: Bloomberg, Angel Research

Exhibit 13: One-year forward P/E band


Exhibit 14: One-year forward P/E chart


Exhibit 15: One-year forward EV/EBITDA band


Exhibit 16: Two-wheeler stock performance v/s Sensex


0102030405060708090

100

Apr

-03

Feb-

04

Dec

-04

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-05

Aug

-06

Jun-

07

Apr

-08

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(`) Share Price (`) 6x 9x 12x 15x

0.0

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18.0

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(x) One-yr forward P/E Three-yr average P/E

0

1,000

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(` cr) EV (` cr) 4x 6x 8x 10x

0 50

100 150 200 250 300 350 400 450 500

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-08

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08

Feb-

09

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-09

Feb-

10

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Jul-1

1

Jan-

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2

TVSL HMCL BJAUT Sensex


July 30, 2012

8

Exhibit 17: Automobile - Recommendation summary

Company Reco. CMP (`)

Tgt. price (`)

Upside (%)

P/E (x) EV/EBITDA (x) RoE (%) FY12-14E EPS

FY13E FY14E FY13E FY14E FY13E FY14E CAGR (%)

Ashok Leyland Buy 22 30 35.6 10.2 8.1 5.3 4.5 13.3 15.6 14.1

Bajaj Auto Accumulate 1,605 1,698 5.8 14.8 13.2 9.9 8.3 46.1 41.3 6.7

Hero MotoCorp Buy 2,031 2,428 19.6 14.6 13.4 8.5 7.2 54.6 44.3 12.9

Maruti Suzuki Accumulate 1,120 1,227 9.5 16.8 12.8 10.0 6.8 12.1 14.1 24.5 Mahindra & Mahindra Buy 704 824 17.0 14.5 12.5 7.8 6.4 21.5 21.4 9.9

Tata Motors Buy 222 305 37.5 5.4 5.1 3.3 3.1 36.2 33.4 (0.7)

TVS Motor Accumulate 38 43 12.0 7.8 7.1 3.4 3.0 18.8 18.1 1.2


Company background

TVS Motor (TVSL), a flagship company of TVS Group, is the third largest 2W manufacturer in India. The company is present across the motorcycles, scooters and mopeds segments, having a market share of ~8%, ~22% and 100%, respectively. The company successfully ventured into the 3W segment in FY2009 and garnered a ~5% market share as of March 31, 2012. The company has three manufacturing facilities in India, located at Hosur (Tamil Nadu), Mysore (Karnataka) and Solan (Himachal Pradesh) with 2W and 3W capacity of 2.75mn and 75,000 units, respectively. TVSL is also the second largest exporter of two-wheelers in the country.


July 30, 2012

9

Profit and loss statement (Standalone)

Y/E March (` cr) FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

Total operating income 3,739 4,430 6,288 7,126 7,545 8,301

% chg 14.2 18.5 41.9 13.3 5.9 10.0

Total expenditure 3,552 4,243 5,896 6,657 7,074 7,798

Net raw material costs 2,783 3,137 4,614 5,261 5,550 6,108

Other mfg costs 111 133 185 210 229 257

Employee expenses 205 248 327 370 396 440

Other 453 724 770 816 899 994

EBITDA 187 187 392 469 471 503

% chg 94.9 0.4 109.2 19.7 0.4 6.8

(% of total op. income) 5.0 4.2 6.2 6.6 6.2 6.1

Depreciation & amortization 103 103 107 118 125 133

EBIT 84 85 285 352 346 370

% chg 6,824.8 1.3 235.5 23.5 (1.6) 7.0


Interest and other charges 65 75 72 57 59 58

Other income 12 67 36 22 25 27

(% of PBT) 40.4 61.7 13.7 6.9 8.1 8.1

Recurring PBT 31 76 248 316 312 340

% chg (12.1) 144.9 225.7 27.6 (1.3) 8.9

Extraordinary income/(exp.) 2 (32) (11) - - -

PBT 30 108 259 316 312 340

Tax 0 (12) 54 67 78 85

(% of PBT) 0.1 (11.0) 20.6 21.3 25.0 25.0

PAT (reported) 31 88 195 249 234 255

ADJ. PAT 29 120 206 249 234 255

% chg 872.9 306.6 71.8 20.9 (5.9) 8.9


Basic EPS (`) 0.7 1.9 4.1 5.2 4.9 5.4

Adj. EPS (`) 0.6 2.5 4.3 5.2 4.9 5.4

% chg 872.9 306.6 71.8 20.9 (5.9) 8.9


July 30, 2012

10

Balance sheet statement (Standalone)

Y/E March (` cr) FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

SOURCES OF FUNDS

Equity share capital 24 24 48 48 48 48

Reserves & surplus 786 842 952 1,122 1,273 1,444

Shareholders’ Funds 810 865 999 1,169 1,320 1,492

Total loans 906 1,003 633 715 740 710

Deferred tax liability 148 115 96 98 98 98

Other long term liabilities - - - - - -

Long term provisions - - 43 49 49 49

Total Liabilities 1,864 1,983 1,771 2,031 2,207 2,349

APPLICATION OF FUNDS

Gross block 1,865 1,909 1,972 2,165 2,312 2,460

Less: Acc. depreciation 869 953 1,035 1,152 1,277 1,410

Net Block 996 956 938 1,013 1,035 1,050

Capital work-in-progress 40 27 57 65 69 74

Goodwill - - - - - -

Investments 478 739 661 931 931 931

Long term loans and advances - - 96 53 53 53

Other noncurrent assets - - - - - -

Current assets 894 965 1,106 1,078 1,249 1,480

Cash 42 101 6 13 48 108

Loans & advances 350 354 206 147 296 326

Other 502 511 893 918 904 1,046

Current liabilities 619 734 1,086 1,110 1,131 1,239

Net current assets 275 231 19 (31) 118 240

Misc. exp. not written off 75 30 - - - -

Total Assets 1,864 1,983 1,771 2,031 2,207 2,349


July 30, 2012

11

Cash flow statement (Standalone)

Y/E March (` cr) FY2009 FY2010 FY2011 FY2012E FY2013E FY2014E

Profit before tax 31 76 248 316 312 340

Depreciation 103 103 107 118 125 133

Change in working capital (29) 103 117 58 (114) (63)

Others 66 112 (37) - - -

Other income (12) (67) (36) (22) (25) (27)

Direct taxes paid (0) 12 (54) (67) (78) (85)

Cash Flow from Operations 160 339 346 403 220 298

(Inc.)/Dec. in fixed assets (88) (30) (93) (201) (151) (152)

(Inc.)/Dec. in investments (139) (262) 78 (270) - -

Other income 12 67 36 22 25 27

Cash Flow from Investing (215) (225) 20 (449) (126) (125)

Issue of equity - - 24 - - -

Inc./(Dec.) in loans 240 97 (370) 82 25 (30)

Dividend paid (Incl. Tax) 19 33 60 72 83 83

Others (226) (102) (254) - - -

Cash Flow from Financing 33 28 (540) 10 (58) (113)

Inc./(Dec.) in cash (22) 142 (174) (36) 35 59

Opening Cash balances 4 42 101 6 13 48

Net cash credit adjustment (60) 83 (79) (43) - -

Closing Cash balances 42 101 6 13 48 108


July 30, 2012

12

Key ratios

Y/E March FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E

Valuation Ratio (x) P/E (on FDEPS) 61.8 15.2 8.8 7.3 7.8 7.1

P/CEPS 13.6 8.2 5.8 5.0 5.1 4.7

P/BV 2.2 2.1 1.8 1.6 1.4 1.2

Dividend yield (%) 0.9 1.6 2.9 3.4 3.9 3.9

EV/Sales 0.6 0.5 0.3 0.2 0.2 0.2

EV/EBITDA 11.8 10.6 4.6 3.4 3.4 3.0

EV / Total Assets 1.2 1.0 1.0 0.8 0.7 0.6

Per Share Data (`) EPS (Basic) 0.7 1.9 4.1 5.2 4.9 5.4

EPS (fully diluted) 0.6 2.5 4.3 5.2 4.9 5.4

Cash EPS 2.8 4.7 6.6 7.7 7.6 8.2

DPS 0.4 0.6 1.1 1.3 1.5 1.5

Book Value 17.1 18.2 21.0 24.6 27.8 31.4

Dupont Analysis EBIT margin 2.3 1.9 4.6 5.0 4.7 4.5

Tax retention ratio 1.0 1.1 0.8 0.8 0.8 0.8

Asset turnover (x) 2.2 2.4 3.4 3.8 3.6 3.8

ROIC (Post-tax) 4.9 5.2 12.6 14.9 12.7 12.9

Cost of Debt (Post Tax) 8.2 8.8 7.0 6.7 6.1 5.9

Leverage (x) 0.4 0.3 0.1 (0.1) (0.2) (0.2)

Operating ROE 3.5 4.0 13.0 13.9 11.4 11.5

Returns (%) ROCE (Pre-tax) 4.8 4.4 15.2 18.5 16.3 16.3

Angel ROIC (Pre-tax) 4.6 4.5 16.1 17.4 16.0 16.5

ROE 3.6 14.3 22.1 23.0 18.8 18.1

Turnover ratios (x) Asset Turnover (Gross Block) 2.0 2.3 3.2 3.4 3.4 3.5

Inventory / Sales (days) 36 26 24 31 32 34

Receivables (days) 13 17 17 12 13 13

Payables (days) 53 51 50 55 52 50

WC cycle (ex-cash) (days) 21 15 4 (1) 1 4

Solvency ratios (x) Net debt to equity 0.5 0.2 (0.0) (0.2) (0.2) (0.2)

Net debt to EBITDA 2.1 0.9 (0.1) (0.5) (0.5) (0.7)

Interest Coverage (EBIT / Int.) 1.3 1.1 3.9 6.2 5.8 6.4


July 30, 2012

13

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Disclosure of Interest Statement TVS Motor Company

1. Analyst ownership of the stock No

2. Angel and its Group companies ownership of the stock No

3. Angel and its Group companies' Directors ownership of the stock No

4. Broking relationship with company covered No

Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%) Reduce (-5% to 15%) Sell (< -15%)

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Documents

TVS Motor Company ACCUMULATE€¦ · TVS Motor Company (TVSL) reported better-than-expected results for 1QFY2013 led by higher-than-expected volumes and stronger-than-expected net