TVS Motor Company (532343) Q4 07/08 earnings summary

Executive summary

• FY08 sales fell 16% to 1.28 million two-wheelers; net revenue declined to Rs. 3,310.35 crore and PBT to Rs. 35.37 crore, reflecting lower volumes and margins.

• New products, three-wheeler entry and Indonesian production expanded the portfolio and footprint; export sales rose 32% to 1.36 lakh units.

Financial highlights

• Net sales and other income were Rs. 3,310.35 crore vs Rs. 3,920.89 crore; EBITDA was Rs. 132.15 crore vs Rs. 203.23 crore.

• Standalone PBT was Rs. 35.37 crore vs Rs. 90.85 crore; PAT was Rs. 31.77 crore vs Rs. 66.60 crore.

• Consolidated revenue was Rs. 3,362.48 crore vs Rs. 3,981.80 crore; consolidated PAT was a loss of Rs. 28.25 crore vs profit of Rs. 74.17 crore, including a Rs. 30.60 crore pro-rata associate loss.

Outlook and guidance

• FY09 was expected to remain challenging amid tight retail finance, inflation, high fuel prices and rising material costs; motorcycle demand was expected to remain flat.

• Industry outlook forecast ungeared scooters up 10% and mopeds up 5% in FY09; GDP growth was projected at 7%.

• Planned launches included Scooty and Apache RTR variants, a large scooter, and four-stroke TVS King versions using petrol, LPG and CNG; cost reduction initiatives aimed to offset input inflation.