TVS Motor Company (532343) Q4 06/07 earnings summary

Executive summary

• FY2006-07 vehicle sales rose 14% to 1.526 million and turnover increased 19% to Rs.3,928.19 crore; PBT fell to Rs.90.85 crore from Rs.168.45 crore as higher input costs pressured margins.

• Export volume grew 30% to 1.03 lakh vehicles; exports reached 44 countries, up from 38.

Financial highlights

• Net sales, excluding excise duty, were Rs.3,854.96 crore versus Rs.3,234.96 crore; other income was Rs.73.23 crore versus Rs.71.00 crore.

• EBITDA was Rs.210.53 crore versus Rs.275.48 crore; PBT was Rs.90.85 crore versus Rs.168.45 crore; PAT was Rs.66.60 crore versus Rs.117.00 crore.

• EPS was Rs.2.80 versus Rs.4.93; raw-material and component consumption increased to Rs.2,903.37 crore from Rs.2,321.09 crore.

• Consolidated net sales were Rs.3,918.08 crore versus Rs.3,266.85 crore; consolidated PBT was Rs.98.31 crore, PAT Rs.74.17 crore and EPS Rs.3.12.

Outlook and guidance

• FY2007-08 outlook anticipated flat two-wheeler sales through at least H1, with motorcycle growth projected at 2%, ungeared scooters at ~13% and mopeds at 5%.

• A new executive motorcycle was planned for H2 FY2007-08; commercial launches of the three-wheeler project and Indonesian TVS Neo were also planned for H2 and July 2007, respectively.

• Retail financiers were expected to remain conservative, while trade-stock correction was expected by mid-year; management expected to take measures to address the challenging market.