TVS Motor Q2 net rises 23% to Rs 116 cr

Revenue up by 8% at Rs 2,881 cr

Two-wheeler manufacturer TVS Motor Company has reported a 23 per cent growth in profit during the the quarter ended September 2015 at Rs 116 crore as compared to Rs 95 crore reported in quarter ended September 2014.

Revenue grew by eight per cent for the quarter ended September 2015 with total revenue growing from Rs 2,667 crore in the quarter ended September 2014 to Rs 2,881 crore in the quarter ended September 2015.

Total two-wheeler sales of the company for the quarter ended September 2015 stood at 6.46 lakh units as against 6.48 lakh units recorded in the corresponding quarter of the previous year.

Scooter sales grew by 12 per cent in the quarter ended September 2015 increasing from 1.95 lakh units recorded in the quarter ended September 2014 to 2.18 lakh units in the quarter ended September 2015.

The company's motorcycle sales during the quarter ended September 2015 stood at 2.55 lakh units, same as recorded in the corresponding quarter of the previous year.

Nitesh Sharma, CFA, Institutional Equity Research Auto & Auto Ancillary said that revenue was in-line with consensus estimates. EBITDA margin expansion of 110 bps q-o-q to 7.4% surprised the Street with consensus looking at 6.4% margins, he said.

According to Sharma, key reason for margin improvement was benefit from lower raw material prices coupled with operating leverage and EBITDA at Rs 211.9 crore was 15% ahead of consensus·
 
"Overall a strong quarter for the company with the long awaited margin expansion crystallising in the quarter. While we don’t have a formal coverage on the company, we still expect it to post the fastest volume/earnings growth amongst the listed two-wheeler players. We gain confidence from the success of its recent offerings & strong new product pipeline. Product pipeline remains strong with the impending launch of TVS Victor, refreshed Apache and a premium sports bike through a JV with BMW," said Sharma.

At 1510 hours, the company's stock on BSE rises 12% at Rs 273.55.