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TVS Motor's Q3 to be a mixed bag amid strong domestic growth and drop in exports

TVS Motor's Q3 to be a mixed bag amid strong domestic growth and drop in exports

TVS Motor's Q3 to be a mixed bag amid strong domestic growth and drop in exports
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By CNBCTV18.com Jan 23, 2023 7:25:49 PM IST (Published)

Two-wheelers major’s standalone revenue from operations in Q3FY23 is likely to see a growth of 12 percent at 6,407 crore vs 5,706 crore earned during the same period a year ago, according to CNBCtv18’s estimates.

Chennai-based TVS Motor Company Ltd’s current market price stands at Rs 983 on Monday, down 16 percent from October 2022 high of Rs 1,171. The Homegrown motorcycle manufacturer’s stock seems to be under pressure because of the continued weakness in its exports.

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Two-wheelers major’s standalone revenue from operations in Q3FY23 is likely to see a growth of 12 percent at Rs 6,407 crore against Rs 5,706 crore earned during the same period a year ago, according to CNBC-TV18's estimates. The company’s Q3 profit after taxes (PAT) is expected to jump 24 percent at Rs 357 crore in Q3FY23 vs Rs 288.3 crore during Q3FY22.
TVS’ December quarter is expected to be a mixed bag in Q3FY23 with total volumes staying flat at 8.79 lakh vs 8.78 lakh during the same period a year ago.
The company is expected to see strong domestic growth amid rising total sales figures. However, that growth may be able to compensate for the weakness in export markets, and the company could ultimately witness good improvement in Q3, with a total volume growth of 8 percent YoY.
TVS’ earnings before interest, taxes, depreciation, and amortisation (EBITDA) is likely to grow 17.8 percent at Rs 669 crore in Q3FY23 as against Rs 568 crore in Q3FY22. The company’s operating profit margins (OPM) are expected to grow to 10.4 percent as compared to 10 percent in the same quarter last year.
Moreover, TVS may record its total exports export volumes dropping 18 percent YoY due to macro headwinds in Africa. The EBITDA margin is likely to remain largely flat QoQ as the benefits of lower RM/marketing cost to offset by operating deleverage.
TVS Motor has been reporting around a 10 percent increase in its margins for the last 4 consecutive quarters:
  • Q2FY22: 9.7 percent
  • Q3FY22: 10 percent
  • Q4FY22: 10.1 percent
  • Q1FY23: 10 percent
  • Q2FY23: 10.2 percent
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