"TVS Motor reported top-line revenue at Rs 16.2bn. The company sold ~205,000 motorcycles, ~134,000 scooters and ~193,000 mopeds. It sold ~9500 three wheelers in 4QFY12 compared to ~12,000 vehicles sold same period previous year. Its blended realisation per vehicle declined ~10%QoQ as a result of a lower 3W sales."
"The company’s operating margins declined 80bps QoQ to 6.1%. This is the lowest quarterly margins done by the company since FY09. This decline was purely led by lower realizations due to lower 3W sales. Market share- 14.1% in 2W, down 90bps YoY; 2.8% in 3W, down 150bps YoY TVS’s share in scooter segment declined from 21.6% in FY11 to 19.4% in FY12. In the motorcycle segment, it lost market share by 80bps YoY to 6.2% in FY12. Its market share in the three wheeler segment declined significantly from 4.3% in FY11 to 2.8% in FY12."
"3W sales continue to be under pressure. As a result, its blended realization will continue to be lower. The company plans to launch two products one each in the motorcycle and scooter segment. We have estimated a ~7% volume growth for two wheelers and 5% volume growth for three wheeler segment. This gives us a volume of 2.51mn in FY14. The stock has significantly underperformed over the last three months on fears of a slowdown in the 3W segment. It currently trades at 7.0xFY14E. We maintain Buy," says Dolat Capital research report.
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