TVS Motors Q3FY14 Net Profit Grows At 31%

Chennai based automobile company, TVS Motors reported a good set of numbers for the third quarter in current financial year. The company posted a handsome net profit growth of 31 % and revenue growth of 13 % on yearly basis.

TVS posted a revenue of Rs 2058 crore during Q3FY14 against Rs 1822 crore in Q3FY13. The revenue growth was because of higher export realisation due to both considerable growth in exports and rupee depreciation compared to last year. On expense front, the company's total expenses grew by 12.80 % on yearly basis. There was an overall increase in all heads under the expenses. However, there was slight improvement of 13 basis points in its EBITDA margins during Q3FY14 on yearly basis. The EBITDA margins stood at 6 % in Q3FY14 as against 5.87 % in Q3FY13. The company posted net profit of Rs 69 crore during Q3FY14 against Rs 52 crore in same period last year. Further, the PAT margins for Q3FY14 expanded by 46 basis points to 3.34 % against 2.88 % in Q3FY13.

During the period under review, total sales in number grew by 3.22 % yearly basis to 5.32 lakh units in Q3FY14 against 5.16 lakh units in Q3FY13. The overall two-wheeler sales grew to 5.12 lakh units during Q3FY14 from 5.03 lakh units in Q3FY13. Motorcycle sales grew to 2.07 lakh units during Q3FY14 from 1.97 lakh units in Q3FY13. Scooter sales grew to 1.23 lakh units during the said quarter from 1.12 lakh units in the same period last year. Interestingly, the two wheeler exports posted 22 % growth and stood at 0.61 lakh in Q3FY14 against 0.50 lakh units in Q3FY13. The three wheeler sales during Q3FY14 grew by 52 % to 20701 units from 13602 units in Q3FY13.

On sequential basis too, TVS posted a growth of 6.29 % in sales volume during the period under review. The company's revenue grew by 3.48 % on sequential basis during Q3FY14. The net profit grew by 17.49 % during Q3FY14 against the same period last year, if we exclude exceptional income of Rs 30.28 crore gain on disinvestment of shares of its subsidiary – TVS Energy in Q2FY14. Further, excluding the exceptional income, the EBITDA and PAT margins expanded by 11 and 40 basis points on sequential basis respectively.

The stock of TVS closed at Rs 71, up by more than 3 % today. We are of the opinion that TVS will continue to show good performance and will be market performer in coming quarters.