TVS Motors - Research Report

 

TVS Motors is a A /T+2 group 2/3 Wheelers sector company having Face value of Rs 1.00. TVS Motors the flagship company of TVS Group is the third largest two-wheeler manufacturer in India and one of the top 10 companies in the world. The company manufactures a wide range of two-wheelers from mopeds to racing inspired motorcycles. The company also manufactures three-wheelers. The company has an annual production capacity of 4 million 2 wheelers & 120000 three wheelers. It is one of the leading two-wheeler and three-wheeler exporters from India distributing to over 60 countries. The company has manufacturing plants located at Hosur in Tamil Nadu Mysore in Karnataka and Nalagarh in Himachal Pradesh. It also has one manufacturing unit located at Karawang in Indonesia. The company has also marked its foray into EV segment with TVS i-Qube and almost dominated the market with highest ever EV 2-wheeler sales.

Fundamentals (FY22-23):

 

CMP	1117
52 - week high	Rs. 1177
52 – week low	Rs 513
Dividend yield (consolidated)	375%
ROCE	21.43 %
BVPS	101.50
Revenue	20790.51 cr.
Debt to Equity	0.36
P/E ratio	45.72
EPS	24.44
P/B ratio	11.01
Market Cap	53,088 cr.
Face value	Rs. 1.0

 

 

Financial Results:

Company’s Net Sales Rs 7,315.70 crore in June 2022 up 56.01%, Quarterly Net Profit at Rs. 305.37 crore in June 2022 up 2994.5% and its EBITDA stands at Rs. 937.39 crore in June 2022 up 124.38% compared to June 2021.

List of recent updates regarding the company:

 

1. TVS recently launched its latest version of iQube I 3 variants and TVS i-Qube ST being the top-of-the-line variant powered by TVS Motor designed 5.1 kWh battery pack and delivers best-in-class 140 km of on-road range per charge. It hosts never like before intelligent ride connectivity with 7” TFT touch screen with 5-way joystick interactivity, music control, proactive notifications including vehicle health, 4G telematics and OTA updates along with personalisation, voice assist and TVS iQube Alexa skillset. Options of plug-and-play carry along off-board chargers with 950W and 650W capacity and with charging time of 3 hours and 4.5 hours are also available with TVS iQube ST and TVS iQube S, respectively.
2. TVS motors dominates the EV 2-wheeler segment showcasing a strong sales growth of 8,103 units in October 2022 as against sales of 395 units in October 2021.
3. TVS Motor will invest Rs 1,000 crore to set up a dedicated factory for the manufacturing of both two-wheelers and three-wheelers with a capacity of around 1 lakh units of EV a year.
4. TVS has also partnered with BMW for jointly manufacturing and selling of EV bikes in India and internationally. TVS has also partnered with Ultraviolette Automotive Pvt. Ltd. (non – listed company) for production of Ultraviolette F77 motorcycle.
5. In Q2FY23, company registered growth of 2 % with sales increasing from 355,033 units in October 2021 to 360,288 units in October 2022.
6. TVS Motor Company signed MOU With Tamil Nadu Government for investment of Rs. 1200 Crore in Future Technologies and Electric Vehicles in next 4 years.
7. TVS has also signed a strategic partnership with Rapido to bring together their strength in mobility and seamless technology platform, respectively. The comprehensive partnership will cover both two-wheeler and three-wheeler vehicles and extend across ICE and EV segments.
8. In 2018, TVS Motor Company associated with leading distributer in the Mexican region Torino Motors a subsidiary of Groupo Autofin to open 40 exclusive stores in the country for the distribution of two-wheelers.
9. In 2018 the company crossed 1 lakh sales mark with the launch of TVS Ntorq, the first in class 125cc engine with 3 valve along with that it also marks the launch of an exclusive technology platform - TVS SmartXonnect - making it India's first connected scooter.

In past three years the stock gave a return of 144.52% as compared to Nifty which gave a return of 51.72% and 145.39% return compared to 51.23% rise in Sensex.

In past few years TVS has launched many premium motorcycles under brand TVS Apache which crossed a key sales milestone of 3 million units in the same year of its launched alog with other 2-wheeler brands. And from then till now company has launched many new versions of TVS Apache, TVS Jupiter, TVS Ntorq and its flagship EV product TVS i-Qube.

With extensive use of futuristic technologies, youth inspiring vehicles, dominant position in EV segment the company has earned a very wide market share in Indian automobile sector. Company is also enjoying the benefits of PLI schemes in Automobile and EV segment introduced by the GOI to promote “Make in India” and “Atmanirbhar Bharat” campaigns.  Considering company’s core businesses, higher penetration into Domestic as well as International markets, good financial records, higher growth focused prospects of management and continuous push of EV in India by the government, the stock is recommended for long term period.

- HET ZAVERI

 

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