Please refer to important disclosures at the end of this report 1
Quarterly highlights (Standalone) Y/E March (` cr) 2QFY13 2QFY12 % chg (yoy) 1QFY13 % chg (qoq)
Net Sales 1,691 1,991 (15.1) 1,820 (7.1)
EBITDA 101 139 (26.9) 108 (5.8)
Adj. EBITDA margin (%) 6.0 7.0 (97)bp 5.9 8bp
Adj. PAT 45 77 (41.5) 51 (11.6)
Source: Company, Angel Research
TVS Motor Company (TVSL) posted a 41.5% yoy (11.6% qoq) decline in net profit for 2QFY2013 which was in-line with our expectations given that volumes during the quarter registered a decline of 19.6% yoy (6.4% qoq). We broadly retain our estimates for the company. We expect the operating environment to remain challenging for TVSL due to rising competition in the sector amidst moderation in demand. We believe that the new launches, Phoenix, launched in September 2012 and two scooters and one motorcycle slated to be launched in FY2014 will be crucial for the company to regain volume momentum going ahead. Nonetheless, due to attractive valuations we maintain our Buy rating the stock.
Weak performance for 2QFY2013: For 2QFY2013, TVSL’s top-line registered a decline of 15.1% yoy (7.1% qoq) to `1,691cr mainly due to a 19.6% yoy (6.4% qoq) decline in volumes. The weak volume performance can be attributed to general slowdown in the two-wheeler industry and increasing competitive intensity in the two-wheeler sector. At the operating level, the EBITDA margins came in-line with our estimates at 6%, witnessing a decline of 97bp yoy (flat qoq) primarily due to lower operating leverage benefits. While the raw-material cost as a percentage of sales declined 204bp yoy (110bp qoq); employee expenses as a percentage of sales witnessed a sharp increase of 170bp yoy (80bp qoq). As a result, the operating profit and net profit registered a decline of 26.9% (5.8% qoq) and 41.5% yoy (11.6% qoq) respectively.
Outlook and valuation: We model in a volume growth of 1.8%/7.8% for FY2013E/14E to factor in the sharp slowdown in the domestic and export two-wheeler markets. We expect the operating margin to remain under pressure due to rising competition which will result in higher advertising spends. Nonetheless, at `39, TVSL is trading at an attractive valuation of 6.9x FY2014E EPS. Thus we maintain our Buy rating on the stock with a target price of `45.
Key financials (Standalone) Y/E March (` cr) FY2011 FY2012 FY2013E FY2014E
Net Sales 6,288 7,126 7,466 8,290
% chg 41.9 13.3 4.8 11.0
Net Profit 199 249 228 266
% chg 65.7 25.3 (8.5) 17.0
EBITDA (%) 6.2 6.6 6.2 6.3
EPS (`) 4.2 5.2 4.8 5.6
P/E (x) 9.2 7.4 8.1 6.9
P/BV (x) 1.8 1.6 1.4 1.2
RoE (%) 21.3 22.9 18.2 18.7
RoCE (%) 15.2 18.5 15.6 16.9
EV/Sales (x) 0.3 0.2 0.2 0.2
EV/EBITDA (x) 4.6 3.4 3.4 2.8 Source: Company, Angel Research
BUY CMP `39 Target Price `45
Investment Period 12 Months
Stock Info
Sector
Bloomberg Code
Shareholding Pattern (%)
Promoters
MF / Banks / Indian Fls
FII / NRIs / OCBs
Indian Public / Others
Abs. (%) 3m 1yr 3yr
Sensex 7.6 6.2 16.8
TVS Motor 0.4 (41.4) 42.7
59.3
20.1
2.8
17.8
TVSL@IN
1,836
1.2
69/32
354,294
Nifty
Reuters Code
1.0
18,562
5,645
TVSM.BO
Avg. Daily Volume
Market Cap (` cr)
Beta
52 Week High / Low
Net Debt (` cr) 638
Automobile
Face Value (`)
BSE Sensex
Yaresh Kothari 022-3935 7800 Ext: 6844
TVS Motor Company Performance Highlights
2QFY2013 Result Update | Automobile
November 1, 2012
TVS Motor Company | 2QFY2013 Result Update
November 1, 2012
2
Exhibit 1: Quarterly financial performance (Standalone) Y/E March (` cr) 2QFY13 2QFY12 % chg (yoy) 1QFY13 % chg (qoq) 1HFY13 1HFY12 % chg (yoy)
Net Sales 1,691 1,991 (15.1) 1,820 (7.1) 3,510 3,737 (6.1)
Consumption of RM 1,185 1,441 (17.7) 1,304 (9.1) 2,489 2,722 (8.5)
(% of Sales) 70.1 72.4 71.7 70.9 72.8 Staff Costs 108 93 15.8 102 5.2 210 184 14.2
(% of Sales) 6.4 4.7 5.6 6.0 4.9 Purchase of goods 37 40 (5.9) 32 15.5 70 72 (2.7)
(% of Sales) 2.2 2.0 1.8 2.0 1.9 Other Expenses 259 279 (7.2) 274 (5.4) 532 504 5.6
(% of Sales) 15.3 14.0 15.0 15.2 13.5 Total Expenditure 1,589 1,853 (14.2) 1,712 (7.2) 3,302 3,482 (5.2)
Operating Profit 101 139 (26.9) 108 (5.8) 209 256 (18.3)
OPM (%) 6.0 7.0 5.9 5.9 6.8 Interest 15 15 3.3 15 (1.7) 31 30 2.7
Depreciation 32 29 11.9 31 3.3 63 56 11.9
Other Income 4 6 (35.2) 5 (18) 9 10 (7.9)
PBT (excl. Extr. Items) 58 102 (42.7) 66 (12.0) 124 179 (30.7)
Extr. Income/(Expense) - - - - - - - -
PBT (incl. Extr. Items) 58 102 (42.7) 66 (12.0) 124 179 (30.7)
(% of Sales) 3.4 5.1 3.6 3.5 4.8 Provision for Taxation 13 24 (46.7) 15 (13.5) 28 43 (35.5)
(% of PBT) 22.3 24.0 22.7 (1.7) 22.5 24.2 Reported PAT 45 77 (41.5) 51 (11.6) 96 136 (29.2)
Adj PAT 45 77 (41.5) 51 (11.6) 96 136 (29.2)
Adj. PATM 2.7 3.9 2.8 2.7 3.6 Equity capital (cr) 47.5 47.5 47.5 47.5 47.5 Reported EPS (`) 1.0 1.6 (41.5) 1.1 (11.6) 2.0 2.9 (29.2)
Source: Company, Angel Research
Exhibit 2: 2QFY2013 – Actual vs Angel estimates Y/E March (` cr) Actual Estimates Variation (%)
Net Sales 1,691 1,719 (1.6)
EBITDA 101 102 (0.3)
EBITDA margin (%) 6.0 5.9 8bp
Adj. PAT 45 44 3.3
Source: Company, Angel Research
TVS Motor Company | 2QFY2013 Result Update
November 1, 2012
3
Exhibit 3: Quarterly volume performance
(unit) 2QFY13 2QFY12 % chg (yoy) 1QFY13 % chg (qoq) 1HFY13 1HFY12 % chg (yoy)
Total volumes 485,923 604,226 (19.6) 519,132 (6.4) 1,005,055 1,139,234 (11.8)
Domestic 430,029 519,727 (17.3) 454,293 (5.3) 884,322 978,056 (9.6)
Exports 55,894 84,499 (33.9) 64,839 (13.8) 120,733 161,178 (25.1)
Motorcycles Domestic 124,935 174,877 (28.6) 142,413 (12.3) 267,348 330,670 (19.1)
Exports 45,891 63,867 (28.1) 50,933 (9.9) 96,824 123,125 (21.4)
Total motorcycles 170,826 238,744 (28.4) 193,346 (11.6) 364,172 453,795 (19.7)
Scooters Domestic 117,220 148,341 (21.0) 105,366 11.3 222,586 257,620 (13.6)
Exports 1,881 9,121 (79.4) 7,466 (74.8) 9,347 17,365 (46.2)
Total scooters 119,101 157,462 (24.4) 112,832 5.6 231,933 274,985 (15.7)
Mopeds
Domestic 183,335 192,859 (4.9) 203,247 (9.8) 386,582 383,531 0.8
Exports 448 3,478 (87.1) 628 (28.7) 1,076 4,939 (78.2)
Total mopeds 183,783 196,337 (6.4) 203,875 (9.9) 387,658 388,470 (0.2)
Three-wheelers
Domestic 4,539 3,650 24.4 3,267 38.9 7,806 6,235 25.2
Exports 7,674 8,033 (4.5) 5,812 32.0 13,486 15,749 (14.4)
Total three-wheelers 12,213 11,683 4.5 9,079 34.5 21,292 21,984 (3.1)
Source: Company, Angel Research
Top-line down 15.1% yoy: For 2QFY2013, TVSL’s top-line registered a decline of 15.1% yoy (7.1% qoq) to `1,691cr mainly due to 19.6% yoy (6.4% qoq) decline in volumes during the quarter. The weak volume performance can be attributed to a general slowdown in the two-wheeler industry and also increasing competition from Honda Motorcycle and Scooters India Ltd (HMSI). As a result, motorcycle and scooters volume registered a sharp decline of 28.4% (11.6% qoq) and 24.4% yoy (up 5.6% qoq) respectively. Three-wheeler sales on the other hand staged a recovery, posting a 4.5% yoy (34.5% qoq) growth driven by 24.4% yoy (38.9% qoq) growth in the domestic markets.
Exhibit 4: Total volumes decline 19.6% yoy
Source: Company, Angel Research
Exhibit 5: Strong growth in net average realization
Source: Company, Angel Research
524,954 524,171 519,514 535,008
604,226
527,700 528,099 519,132 485,999
33.4 39.9 24.0
15.3 15.1
0.7 1.7 (3.0) (19.6)
(30.0)
(20.0)
(10.0)
0.0
10.0
20.0
30.0
40.0
50.0
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2QFY
11
3QFY
11
4QFY
11
1QFY
12
2QFY
12
3QFY
12
4QFY
12
1QFY
13
2QFY
13
(%)(units) Total volume yoy growth (RHS)
30,285 30,781 30,968
31,911 32,300
32,808
30,352
34,502 34,191
6.8 7.6
8.9 8.1
6.7 6.6
(2.0)
8.1 5.9
(4.0)
(2.0)
0.0
2.0
4.0
6.0
8.0
10.0
28,000
29,000
30,000
31,000
32,000
33,000
34,000
35,000
2QFY
11
3QFY
11
4QFY
11
1QFY
12
2QFY
12
3QFY
12
4QFY
12
1QFY
13
2QFY
13
(%)(`) Net average realization yoy growth (RHS)
TVS Motor Company | 2QFY2013 Result Update
November 1, 2012
4
Exhibit 6: Better-than-expected top-line growth
Source: Company, Angel Research
Exhibit 7: Domestic market share trend
Source: Company, SIAM, Angel Research
EBITDA margin at 6.1%: On the operating front, the EBITDA margin came in-line with our estimates at 6%, witnessing a decline of 97bp yoy (flat qoq) primarily due to lower operating leverage benefits. While the raw-material cost as a percentage of sales declined 204bp yoy (110bp qoq); employee expenses as a percentage of sales witnessed a sharp increase of 170bp yoy (80bp qoq).
The management expects margins to improve going ahead, led by improved volumes and benign raw material prices. However, we believe that margins will remain under pressure, given the weak domestic demand scenario and increasing competition.
Exhibit 8: EBITDA margin mainatined at 6%
Source: Company, Angel Research
Exhibit 9: Net profit down 41.5% yoy
Source: Company, Angel Research
Net profit down 41.5% yoy: TVSL reported a 41.5% yoy (11.6% qoq) decline in its net profit to `45cr; which was broadly in-line with our estimates. The bottom-line performance during the quarter was weak led by weak performance at the operating level.
1,616 1,647 1,635 1,746 1,991
1,761 1,627
1,820 1,691
43.0 51.1
34.5
25.3 23.2
6.9 (0.5)
4.2
(15.1)
(20.0)
(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
2QFY
11
3QFY
11
4QFY
11
1QFY
12
2QFY
12
3QFY
12
4QFY
12
1QFY
13
2QFY
13
(%)(` cr) Net sales (LHS) Net sales growth (RHS)
21.6 21.9 21.3 20.5 22.9
19.3
15.4 15.3 16.0
7.1 6.9 6.8 6.3 6.9 5.5 5.9 5.4 5.3
4.5 3.7 3.5 2.3 2.6 2.8 3.2 2.9 3.3
15.4 15.1 14.7 14.3 15.2 13.4 13.6 12.8 13.1
0.0
5.0
10.0
15.0
20.0
25.0
2QFY
11
3QFY
11
4QFY
11
1QFY
12
2QFY
12
3QFY
12
4QFY
12
1QFY
13
2QFY
13
(%) Scooters Motor CyclesThree Wheelers Total Two Wheelers
6.7 6.1 5.9 6.7 7.0 6.5 6.1 5.9 6.0
73.7 74.7 74.6 76.9 75.9 73.9 74.2 74.6 73.6
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
2QFY
11
3QFY
11
4QFY
11
1QFY
12
2QFY
12
3QFY
12
4QFY
12
1QFY
13
2QFY
13
(%) EBITDA margin Raw material cost/sales
55 56 44 59 77 57 57 51 45
3.4 3.4
2.7
3.4
3.9
3.2 3.5
2.8 2.7
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
2QFY
11
3QFY
11
4QFY
11
1QFY
12
2QFY
12
3QFY
12
4QFY
12
1QFY
13
2QFY
13
(%)(` cr) Net profit (LHS) Net profit margin (RHS)
TVS Motor Company | 2QFY2013 Result Update
November 1, 2012
5
Investment arguments
Success of new launches key to volume growth: TVSL posted a 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 three new models in FY2014 (executive segment bike, two scooters and a diesel three-wheeler), and we believe the success of these new launches is the 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 2.41mn units in FY2014E.
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
We model in a volume growth of 1.8%/7.8% for FY2013E/14E to factor in the sharp slowdown in the domestic and export two-wheeler markets. We expect operating margins to remain under pressure due to rising competition which will result in higher advertising spends. Nevertheless, we broadly retain our estimates for the company.
Exhibit 10: Change in estimates Y/E March Earlier Estimates Revised Estimates % chg
FY2013E FY2014E FY2013E FY2014E FY2013E FY2014E
Net Sales (` cr) 7,500 8,350 7,466 8,290 (0.5) (0.7)
OPM (%) 6.3 6.4 6.2 6.3 (10)bp (6)bp
EPS (`) 4.8 5.5 4.8 5.6 (0.4) 1.7
Source: Company, Angel Research
We expect the operating environment to remain challenging for TVSL due to rising competition in the sector amidst moderation in demand. We believe that the new launch, Phoenix, launched in September 2012 and two scooters and one motorcycle slated to be launched in FY2014 will be crucial for the company to regain volume momentum going ahead. At the current market price of `39, TVSL is trading at an attractive valuation of 6.9x FY2014E EPS. Thus we maintain our Buy rating on the stock with a target price of `45.
TVS Motor Company | 2QFY2013 Result Update
November 1, 2012
6
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 2,234,662 2,410,041 Motorcycles 634,918 640,965 836,821 841,362 816,121 856,927 Scooters 246,153 309,501 452,006 529,095 555,550 622,216 Mopeds 435,589 571,563 703,717 785,942 825,239 891,258 Three-Wheelers 4,874 14,866 39,860 39,739 37,752 39,640 Change yoy (%) 3.8 16.3 32.2 8.1 1.8 7.8 Motorcycles 6.2 1.0 30.6 0.5 (3.0) 5.0 Scooters (6.9) 25.7 46.0 17.1 5.0 12.0 Mopeds 5.9 31.2 23.1 11.7 5.0 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 1,932,983 2,072,635 Exports (units) 193,398 165,414 234,411 286,466 301,679 337,406
Source: Company, Angel Research
Exhibit 12: Angel vs consensus forecast
Angel estimates Consensus Variation (%)
FY13E FY14E FY13E FY14E FY13E FY14E
Total op. income (` cr) 7,466 8,290 7,497 8,380 (0.4) (1.1) EPS (`) 4.8 5.6 4.5 5.5 6.7 2.8
Source: Bloomberg, Angel Research
Exhibit 13: One-year forward P/E band
Source: Company, Angel Research
Exhibit 14: One-year forward P/E chart
Source: Company, Angel Research
Exhibit 15: One-year forward EV/EBITDA band
Source: Company, Angel Research
Exhibit 16: Two-wheeler stocks’ performance vs Sensex
Source: Company, Angel Research
0102030405060708090
100
Apr
-03
Mar
-04
Mar
-05
Feb-
06
Jan-
07
Jan-
08
Dec
-08
Dec
-09
Nov
-10
Nov
-11
Oct
-12
(`) Share Price (`) 6x 9x 12x 15x
0.0 2.0 4.0 6.0 8.0
10.0 12.0 14.0 16.0 18.0 20.0
Jul-0
9
Oct
-09
Jan-
10
Apr
-10
Jul-1
0
Oct
-10
Jan-
11
Apr
-11
Jul-1
1
Oct
-11
Jan-
12
Apr
-12
Jul-1
2
Oct
-12
(x) One-yr forward P/E Three-yr average P/E
0
1,000
2,000
3,000
4,000
5,000
6,000
Apr
-03
Mar
-04
Mar
-05
Feb-
06
Jan-
07
Jan-
08
Dec
-08
Dec
-09
Nov
-10
Nov
-11
Oct
-12
(` cr) EV (` cr) 4x 6x 8x 10x
0 50
100 150 200 250 300 350 400 450 500
Mar
-08
Sep-
08
Mar
-09
Sep-
09
Mar
-10
Sep-
10
Mar
-11
Sep-
11
Apr
-12
Oct
-12
TVSL HMCL BJAUT Sensex
TVS Motor Company | 2QFY2013 Result Update
November 1, 2012
7
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 24 30 27.9 10.9 8.6 5.5 4.7 13.3 15.6 14.1
Bajaj Auto Neutral 1,845 - - 17.0 15.0 11.7 9.9 46.2 41.6 7.3
Hero MotoCorp Neutral 1,905 - - 16.1 14.6 8.4 7.0 48.3 41.9 9.7
Maruti Suzuki Neutral 1,455 - - 22.0 15.4 11.4 7.6 11.9 15.1 36.6 Mahindra & Mahindra Accumulate 899 986 9.6 16.4 14.3 9.5 7.9 24.3 23.4 15.9
Tata Motors Buy 267 316 18.4 6.9 5.9 3.8 3.2 32.6 28.8 11.6
TVS Motor Buy 39 45 16.0 8.1 6.9 3.4 2.8 18.2 18.7 3.5
Source: Company, Angel Research
Company background
TVS Motor (TVSL), a flagship company of the 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.
TVS Motor Company | 2QFY2013 Result Update
November 1, 2012
8
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 7,466 8,290
% chg 14.2 18.5 41.9 13.3 4.8 11.0
Total expenditure 3,552 4,243 5,896 6,657 7,006 7,764
Net raw material costs 2,783 3,137 4,614 5,261 5,524 6,126
Other mfg costs 111 133 171 202 220 245
Employee expenses 205 248 327 370 396 439
Other 453 724 784 823 866 953
EBITDA 187 187 392 469 459 526
% chg 94.9 0.4 109.2 19.7 (2.2) 14.5
(% of total op. income) 5.0 4.2 6.2 6.6 6.2 6.3
Depreciation & amortization 103 103 107 118 128 137
EBIT 84 85 285 352 331 388
% chg 6,824.8 1.3 235.5 23.5 (5.8) 17.2
(% of total op. income) 2.3 1.9 4.5 4.9 4.4 4.7
Interest and other charges 65 75 72 57 61 60
Other income 12 67 36 22 25 27
(% of PBT) 40.4 61.7 14.1 6.9 8.4 7.6
Recurring PBT 31 76 248 316 296 355
% chg (12.1) 144.9 225.7 27.6 (6.6) 20.1
Extraordinary income/(exp.) 2 (32) (4) - - -
PBT 30 108 252 316 296 355
Tax 0 (12) 54 67 68 89
(% of PBT) 0.1 (11.0) 21.2 21.3 23.0 25.0
PAT (reported) 31 88 195 249 228 266
ADJ. PAT 29 120 199 249 228 266
% chg 872.9 306.6 65.7 25.3 (8.5) 17.0
(% of total op. income) 0.8 2.7 3.2 3.5 3.0 3.2
Basic EPS (`) 0.7 1.9 4.1 5.2 4.8 5.6
Adj. EPS (`) 0.6 2.5 4.2 5.2 4.8 5.6
% chg 872.9 306.6 65.6 25.3 (8.5) 17.0
TVS Motor Company | 2QFY2013 Result Update
November 1, 2012
9
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 1,282 1,477
Shareholders’ Funds 810 865 999 1,169 1,330 1,524
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 2,216 2,381
APPLICATION OF FUNDS Gross block 1,865 1,909 1,972 2,154 2,324 2,495
Less: Acc. depreciation 869 953 1,035 1,129 1,257 1,394
Net Block 996 956 938 1,026 1,068 1,101
Capital work-in-progress 40 27 57 53 58 62
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 1,234 1,510
Cash 42 101 6 13 63 159
Loans & advances 350 354 301 247 299 332
Other 502 511 799 819 872 1,019
Current liabilities 619 734 1,086 1,110 1,127 1,277
Net current assets 275 231 19 (31) 107 233
Misc. exp. not written off 75 30 - - - -
Total Assets 1,864 1,983 1,771 2,031 2,216 2,381
TVS Motor Company | 2QFY2013 Result Update
November 1, 2012
10
Cash flow statement (Standalone)
Y/E March (` cr) FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E
Profit before tax 31 76 248 316 296 355
Depreciation 103 103 107 118 128 137
Change in working capital (29) 103 (67) 63 (83) (31)
Others 66 112 35 33 - -
Other income (12) (67) (36) (22) (25) (27)
Direct taxes paid (0) 12 (54) (67) (68) (89)
Cash Flow from Operations 160 339 234 441 247 346
(Inc.)/Dec. in fixed assets (88) (30) (93) (177) (175) (175)
(Inc.)/Dec. in investments (139) (262) 78 (270) - -
Other income 12 67 36 22 25 27
Cash Flow from Investing (215) (225) 20 (425) (150) (148)
Issue of equity - - 24 - - -
Inc./(Dec.) in loans 240 97 (295) (72) 25 (30)
Dividend paid (Incl. Tax) 19 33 60 72 72 72
Others (226) (102) (218) (150) - -
Cash Flow from Financing 33 28 (428) (150) (47) (102)
Inc./(Dec.) in cash (22) 142 (174) (135) 50 96
Opening Cash balances 4 42 101 6 13 63
Net cash credit adjustment (60) 83 (79) (142) - -
Closing Cash balances 42 101 6 13 63 159
TVS Motor Company | 2QFY2013 Result Update
November 1, 2012
11
Key ratios
Y/E March FY2009 FY2010 FY2011 FY2012 FY2013E FY2014E
Valuation Ratio (x) P/E (on FDEPS) 62.3 15.3 9.2 7.4 8.1 6.9
P/CEPS 13.7 8.3 6.0 5.0 5.2 4.6
P/BV 2.3 2.1 1.8 1.6 1.4 1.2
Dividend yield (%) 0.9 1.6 2.8 3.4 3.4 3.4
EV/Sales 0.6 0.5 0.3 0.2 0.2 0.2
EV/EBITDA 18.7 16.6 4.6 3.4 3.4 2.8
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 4.8 5.6
EPS (fully diluted) 0.6 2.5 4.2 5.2 4.8 5.6
Cash EPS 2.8 4.7 6.4 7.7 7.5 8.5
DPS 0.4 0.6 1.1 1.3 1.3 1.3
Book Value 17.1 18.2 21.0 24.6 28.0 32.1
DuPont Analysis EBIT margin 2.3 1.9 4.5 4.9 4.4 4.7
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 12.3 14.6 12.2 13.3
Cost of Debt (Post Tax) 8.2 8.8 7.0 6.7 6.4 6.2
Leverage (x) 0.4 0.3 0.1 (0.1) (0.2) (0.2)
Operating ROE 3.5 4.0 12.7 13.7 11.1 11.7
Returns (%) ROCE (Pre-tax) 4.8 4.4 15.2 18.5 15.6 16.9
Angel ROIC (Pre-tax) 0.9 0.9 16.1 17.4 15.4 17.5
ROE 3.6 14.3 21.3 22.9 18.2 18.7
Turnover ratios (x) Asset Turnover (Gross Block) 2.0 2.3 3.2 3.5 3.3 3.4
Inventory / Sales (days) 36 26 24 28 30 32
Receivables (days) 13 17 14 13 13 13
Payables (days) 53 51 49 53 53 52
WC cycle (ex-cash) (days) 21 15 4 (1) (0) 3
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) (0.6) (0.7)
Interest Coverage (EBIT / Int.) 1.3 1.1 3.9 6.2 5.5 6.4
TVS Motor Company | 2QFY2013 Result Update
November 1, 2012
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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