TVS Motor Company, the country’s fourth largest two-wheelers maker, is expected to post a double-digit growth in net profit during the June quarter led by strong demand for scooters, comeback of the rural demand and strong export of three-wheelers.
As per a Reuters poll of analysts, the Chennai-based company is expected to post a net profit of Rs 173 crore for the June quarter, an increase of 34 percent as against Rs 129 crore posted in the same quarter a year ago.
The company, which makes bikes under the brands Apache and Star and scooters under the brands Jupiter and Scooty, saw its two-wheeler volumes grow by 14 percent to 892,754 units in June quarter as compared to 785,071 units sold in the same quarter a year ago.
TVS is the fourth largest motorcycle manufacturer, the second largest scooter maker and the only manufacturer of mopeds in India. The company’s margins are expected to be under pressure with the price war started by rival Bajaj Auto in the budget bike segment, but it may be more than offset by a significant rise in three-wheeler export volumes.
Three-wheeler sales for the reporting quarter stood at 35,520 units, a growth of 172 percent compared to 13,037 units sold in the same quarter last year. The company’s share in the three-wheeler segment is miniscule where it trails rivals at the fifth spot, as per data shared by the Society of Indian Automobile Manufacturers.
“Average selling price increased by 11% YoY led by a richer product mix and depreciation of INR against USD (4% YoY). We expect EBITDA margin to increase by 100 bps YoY due to low-base effect in 1QFY18,” said a report from Kotak Institutional Equities.
As per the poll, revenue of the company is expected to come in at Rs 4,220 crore for the June quarter, a growth of 13 percent as compared to Rs 3,743 crore posted in the same quarter a year ago.
Source: moneycontrol.com