TVS Motor Q3 preview: Volume decline to dent earnings, margins may improve

Margins are likely to tick up as a result of product mix and low raw material cost while negative operating leverage will cap the gains

TVS Motor Company is scheduled to announce its December 2019 quarter results later in the day. Analysts expect the automaker to post a double-digit decline in revenues as well as profits, largely due to fall in volumes while realization improvement will cushion the blow.

During the quarter under review, TVS Motor Company's volumes declined 17 per cent YoY and 7.3 per cent sequentially. Kotak Securities pegs 26 per cent decline in domestic markets and 23 per cent YoY growth in export markets in volumes. The company's average sell price (ASP) is likely to grow around 5 per cent YoY due