TVS Motor Company (532343) Q4 03/04 earnings summary

Executive summary

• FY04 vehicle sales reached 1.147 million, up 2.5% YoY; sales and other income rose 4.8% to ₹2,856.42 crore, with PAT up 8.2% to ₹138.49 crore.

• 4-stroke motorcycles, variomatic scooters and exports were growth drivers, while declining demand for 2-stroke motorcycles pressured overall motorcycle share.

Financial highlights

• Net sales, excluding excise duty, were ₹2,820.21 crore versus ₹2,704.53 crore; other income was ₹36.21 crore versus ₹20.87 crore.

• EBITDA was ₹295.63 crore, up 4.1% YoY; PBT rose 6.6% to ₹214.53 crore and PAT rose 8.2% to ₹138.49 crore.

• Net interest fell to ₹1.21 crore from ₹2.83 crore; tax provision, including deferred tax, was ₹76.04 crore versus ₹73.19 crore.

• Motorcycle revenue was ₹1,940.05 crore, scooters ₹386.19 crore, mopeds ₹327.88 crore and spares/accessories ₹166.09 crore.

Outlook and guidance

• Two-wheeler industry growth of 9%–10% was expected in FY05, supported by anticipated ~7% Indian economic growth and a normal monsoon.

• New FY04 launches were expected to support FY05 growth; a 4-stroke economy motorcycle was planned to address exposure to declining 2-stroke demand.

• Three-wheeler prototype development was underway at Mysore; manufacturing options in Southeast Asian countries were being explored.

• Dealer Management System rollout to major dealerships was planned for FY05; exports remained a growth focus.