TVS Motor Q3 Results Review - Inline; Mix, Forex Drive ASPs; EV Ramp-Up Continues: Motilal Oswal
TVS Motor's Q3 FY23 operating performance was inline, driven by higher average selling prices despite flat volumes.
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Motilal Oswal Report
TVS Motor Company Ltd.’s Q3 FY23 operating performance was inline, driven by higher average selling prices despite flat volumes.
Revenue/Ebitda/adjusted profit after tax grew 15%/16%/22% YoY in Q3 FY23 to Rs 65.4 billion/Rs 6.6 billion/Rs 3.5 billion. TVS Motor’s nine months-FY23 revenue/Ebitda/adjusted PAT grew 22%/17%/12% YoY. Volumes were flat YoY at 879,400 units. Net ASPs rose 15% YoY to Rs 74,400 (versus estimate Rs 72,000) due to price hikes, favorable forex and a better mix.
Net sales grew 15% YoY to Rs 65.4 billion (versus estimate Rs 63.3 billion). Gross margins expanded by 80 bps YoY/70 bps QoQ to 24.5% (versus estimate 24.7%), aided by the softening of raw material costs (30 bps QoQ), forex and mix. However, operating deleverage led to flat Ebitda margins.
Export markets are seeing some green shoots in Q4, while domestic demand should benefit from positive agri indicators and improving supplies for premium products.
TVS Motor is focusing on ramping up production of e-scooters, following up with product launches in e-two-wheelers/three-wheelers in the next 1.5 years.
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