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TVS Motor Q1 Earnings Preview: What you should watch out for

Updated : July 22, 2019 08:16 AM IST

TVS Motor will be reporting its first-quarter earnings on Monday and analysts expect the two-wheeler maker to report muted growth this time around.

  • It has been a slow quarter for all the automakers and TVS will be no different. That is the reason why the stock is down 30 percent in 2019. It closed at a 52-week low on a Friday because of weakness in demand and high inventory levels.

  • One should not expect anything spectacular from the numbers, revenue growth in single-digit of around 8.5 percent is what the street is anticipating.

  • The margins will be around that 7-7.2 percent band itself versus 6.9 percent the same time last year and the profits will fall by about 1.7 percent.

  • Mopeds have suffered the most this time. Moped volumes were down 21 percent year-on-year (YoY) in the quarter gone by.

  • However, the realisations will go up for TVS Motor, they are expected to rise by 8 percent because of two reasons. One is that there has been a price hike that all of these companies have taken because of the new anti-lock braking system (ABS) norms so that will reflect in higher realisations and two there has been a higher share of exports in the product mix. So that is something that will aid the realisations.

  • The analysts are expecting about Rs 48,300 per unit compared to an average of Rs 45,000-47,000 per unit in the preceding four quarters. Realisations will improve because of the price hikes that the company has undertaken.
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