Shares of TVS Motor Company (TVCL) surged 8 per cent to Rs 685 on the BSE in Tuesday's intra-day trade after the company registered highest-ever operating earnings before interest tax and depreciation and amortization (Ebitda) of Rs 568 crore during December quarter (Q3FY22).
The stock, however, pared gained and was up 1 per cent higher at Rs 644.95 at 10:29 AM, as compared to 0.40 per cent decline in the S&P BSE Sensex.
The two and three-wheeler manufacturer had posted operating Ebitda of Rs 511 crore in the quarter ended December 2020 (Q3FY21). Operating Ebitda margin improved 50 bps at 10 per cent during the quarter as against 9.5 per cent in the year-ago quarter.
The company also reported highest ever operating revenue of Rs 5,706 crore during the quarter as against Rs 5,391 crore in the corresponding quarter of previous fiscal. Profit after tax (PAT) grew 9 per cent year-on-year to Rs 288 crore from Rs 266 crore reported in the previous year quarter.
"TVSL's performance was above estimate driven by improved mix leading to strong ASP growth and margin beat. The management's focus remains on expanding the EV capacity, its portfolio and reach. It is also searching for an investor in its NBFC business, which can unlock value," Motilal Oswal Financial Services said in result update.
Volume growth is likely to be driven by new product launches (Raider and Jupiter 125) in the domestic market as well as a ramp-up in exports. It is enjoying the benefits of economies of scale and operating leverage, resulting in the EBITDA margin sustaining at double-digit level. However, TVSL earns around 40 per cent of its overall EBITDA from the domestic Scooter business, making it vulnerable to an EV disruption in the listed 2W space, the brokerage firm said with a 'neutral' rating on the stock.
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