The last one year has seen a 61% rise in the share price of TVS Motors Company, India’s third largest motorcycle maker. This positive trend is attributed to the anticipation of impressive Q4 financial results, driven by a strong product lineup and increased sales volumes. Moreover, profitability has been supported by favorable pricing and lower commodity costs.
TVS Motors Q4 Profit:
TVS Motor’s net profit for Q4 is estimated at Rs 545 crore which would represent a 33% YoY growth. Additionally, revenue from operations during this period is expected to increase by about 21% to Rs 8,004 crore.
According to Nuvama Institutional Equities, robust volume growth is the main driver of year-on-year revenue expansion. The company’s EBITDA (earnings before interest taxes depreciation and amortization) for Q4 FY23 is projected at Rs. 893 cr up more than 31% YoY.
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On the other hand Nuvama expects strategic pricing as well as export sales will lead to an improvement in the EBITDA margin while Axis Securities also expects an enhanced operational efficiency leading to margin growth but expects some pressure on margins due to raw material prices which are yet not very clear on electric vehicle (EV) scooters.
TVS Motor sold 10.63 lakh units in Q4 FY24 against a target of Rs 8,004 crore and this marked a YoY increase of 22%. As a result their shares were valued at Rs 1980 while there was also a surge in Nifty index by around 22%.
Analysis On TVS Motors Q4 Result:
Analysts say attention should be paid to how TVS Motor seeks to tackle any industry slowdown that may occur and transition into electric vehicles. According to Nuvama Institutional Equities ,the company has made clear that it will focus on E-mobility initiatives and market demand going forward.
However, despite having strong R&D capabilities and ability to develop new products, some analysts ,BNP Paribas analysts among them, are cautious in their assessment of TVS Motor. Again, they however caution that this global slowdown may impact domestic volume growth even as the company gains market share in ICE vehicles.
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