TVS Motor Q3 Results Review - Resilient Margins Amid Adversities: ICICI Securities

ICICI Securities Report

TVS Motor Company Ltd.’s Q3 FY23 Ebitda margin at 10.1%, largely flat QoQ, was in line with our estimate. Ebitda per vehicle rose 5% QoQ to ~Rs 7,500 led by:

1. ~6% higher average selling price QoQ due to ~1% blended price hike plus favorable currency, and

2. higher mix (~200 bps increase) of electric vehicle model iQube.

Despite operating leverage being adverse (14% QoQ lower volumes) and margin-dilutive EV portfolio mix being higher, Ebitda margin was flat QoQ aided by lower input commodity costs and currency benefits. With iQube breaching ~12,000 unit sales/month and clocking ~29,000 units in Q3, TVS Motor is looking forward to double its wholesales in Q4 itself, implying sales of ~18,000-20,000 units/month soon.

With distribution network of EVs breaching 200 outlets now and new EV models in the pipeline, TVS Motor is looking forward to make the EV portfolio Ebitda-breakeven soon.

Exports are bottoming out with inventory destocking at the distributor level being largely over. NBFC business delivered Rs 1.35 billion of profit before tax during the quarter along with PT Indonesia remaining profit after tax-positive.

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More Research Reports On TVS Motor's Q3 FY23 Results Review

• Inline; Mix, Forex Drive ASPs; EV Ramp-Up Continues: Motilal Oswal

• Good Show In Tough Time: Dolat Capital

• Inline Quarter; Focus On Ramping-Up E-Two-Wheeler Volumes: Systematix

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