TVS Motor Company
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TP change
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30 July 2020
1QFY21 Results Update | Sector: Automobile
CMP: INR402
TP: INR392 (-3%)
Neutral
Above est.; Lower other expenses drive beat
2H recovery, price hike of 1.1% with cost cutting to drive margins
TVS Motor Company (TVSL)’s operating performance was supported by
lower other expenses. It expects cost-cutting efforts to boost margins, with
volume recovery and the Premium portfolio outperforming.
We upgrade our FY21/FY22E EPS by 2%/5% to factor volume recovery.
Maintain
Neutral,
with TP of INR392 (~18x Sep’22 EPS + INR40 for NBFC).
1QFY21 revenue declined 68% to ~INR14.3b, and reported EBITDA / adj. loss
of ~INR0.5b/INR1.4b.
Volumes fell by ~71% YoY (-58% QoQ). Realizations grew ~10.8% YoY (-2.5%
QoQ) to INR53.6k (v/s est. INR56.2k), driven by the BS6 cost pass-through.
Gross margins contracted 90bp QoQ (70bp YoY) to 24.1% (est. 25.6%),
weighed by a weaker product mix (lower export mix and Apache) and the
impact of the BS6 cost inflation (as contribution margins are yet to be
passed through).
Furthermore, op. deleverage resulted in EBITDA loss of INR488m (v/s est.
loss of INR663m), although the impact was diluted by cost-cutting initiatives
and cost deferment, as reflected in lower-than-expected other expenses. It
reported loss of ~INR1.4b (v/s est. loss of ~INR1.64b).
Interest cost increased due to additional borrowings in 1QFY21 to ensure
timely payment to suppliers.
Demand outlook:
The company expects demand recovery in 2HFY21, with
TVSL performing better than the industry on account of its portfolio.
The company expects premiumization to continue, albeit delayed by one or
two quarters due to the COVID-19 impact. This should benefit Apache and
Ntorq.
For operational dealerships, demand is back at pre-COVID-19 levels. At the
start of Jul’20, 85% of dealerships were operational. However, this has
dropped to 75% due to fresh lockdowns in select markets.
Production bottlenecks prevailed in Jun’20, but are easing in Jul’20. Apache
faced severe production-related challenges, which impacted the mix in
1QFY21.
Expect margins to improve in 2H, driven by cost cutting and focused market
strategy. Jun’20 EBITDA and PBT were positive, with July thus far faring even
better.
It took a 0.7% price hike in 1QFY21 and has taken a 0.4% price hike in July.
Finance:
Finance penetration increased to 52% v/s 46% YoY. TVS Credit
holds 54% share of TVSL Financing. TVS Credit’s moratorium is currently at
14% (incl. Morat 2.0) v/s 37% earlier, backed by strong collection efforts.
Collections are now at pre-COVID-19 levels.
Capex
would be INR3b for FY21 and investment in TVS Credit would be
~INR750m.
Op. performance driven by substantially lower other expenses
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
Financials & Valuations (INR b)
FY20 FY21E
Y/E March
Sales
164.2 159.5
EBITDA
13.5
12.5
Adj. PAT
6.2
4.9
EPS (INR)
11.9
10.3
EPS Gr. (%)
-15.4
-13.8
BV/Sh (INR)
76.2
82.2
Ratios
RoE (%)
16.3
13.0
RoCE (%)
17.1
13.7
Payout (%)
33.8
40.9
Valuations
P/E (x)
33.7
39.1
P/BV (x)
5.3
4.9
Div. Yield (%)
0.9
0.9
FCF Yield (%)
3.5
3.2
TVSL IN
475
191.1 / 2.6
503 / 240
-3/-7/11
988
42.6
FY22E
188.8
17.6
8.3
17.5
70.4
94.9
19.8
20.1
27.4
22.9
4.2
1.0
4.5
Highlights from management commentary
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Jun-20 Mar-20 Jun-19
57.4
57.4
57.4
22.0
21.2
16.4
10.5
11.4
15.7
10.1
10.0
10.5
FII Includes depository receipts
Jinesh Gandhi – Research Analyst
(Jinesh@MotilalOswal.com)
Vipul Agrawal – Research Analyst
(Vipul.Agrawal@MotilalOswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
3 September 2019
1
 Motilal Oswal Financial Services
TVS Motor Company
Valuation and view
We upgrade our FY20/FY21 EPS by 2%/5% to INR10.3/17.5 to reflect volume
recovery. Valuation at 39.1x/22.9x FY21E/FY22E EPS already reflects the large
part of earnings recovery. Maintain Neutral, with TP of ~INR392.
FY20
2Q
885.8
(18.6)
49.1
7.0
43,478
(12.9)
3,820
8.8
285
1,241
49
2,343
-760
3,103
17.8
1,953
(7.6)
FY21E
2QE
848.4
(4.2)
54.7
11.5
46,418
6.8
3,891
8.4
300
1,260
30
2,361
0
2,361
25.0
1,771
(9.4)
FY20
3QE
913.4
11.2
55.3
10.0
50,473
22.3
4,733
9.4
300
1,270
30
3,193
0
3,193
25.0
2,395
32.5
4QE
853.8
34.9
56.5
2.8
48,262
38.6
4,382
9.1
292
1,279
47
2,859
0
2,859
26.1
2,113
112.8
3,263.5
(16.6)
50.3
8.2
164,233
(9.8)
13,459
8.2
1,022
4,890
321
7,867
323
7,544
21.5
6,176
(7.8)
2,882.5
(11.7)
55.3
9.9
159,471
(2.9)
12,518
7.8
1,415
4,719
133
6,517
6,517
25.0
4,887
(20.9)
S/A Quarterly Perfor.
Y/E March (INR m)
Vols ('000 units)
Growth (%)
Realn (INR '000/unit)
Growth (%)
Net Sales
Growth (%)
EBITDA
EBITDA Margin(%)
Interest
Depreciation
Other Income
PBT before EO Exp
EO Exp
PBT after EO Exp
Tax rate (%)
Adjusted PAT
Growth (%)
(INR M)
FY21E
1Q
923.2
(0.5)
48.4
7.7
44,686
7.1
3,558
8.0
291
1,194
12
2,085
0
2,085
31.8
1,423
(4.6)
3Q
821.5
(17.0)
50.2
6.6
41,255
(11.5)
3,633
8.8
211
1,213
9
2,218
760
1,457
16.9
1,808
1.3
4Q
632.9
(30.2)
55.0
13.7
34,814
(20.7)
2,449
7.0
235
1,243
251
1,222
323
898
17.8
993
(27.8)
1Q
266.9
(71.1)
53.6
10.8
14,317
(68.0)
-488
(3.4)
523
911
26
-1,896
0
(1,896)
26.7
-1,391
(197.7)
Key performance indicator
Y/E March (INR m)
Volumes ('000 units)
Growth (%)
Dom. 2W Mkt Sh (%)
Net Realization
Growth YoY (%)
Cost Break-up
RM Cost (% of sales)
Staff Cost (% of sales)
Other Cost (% of sales)
Gross Margins (%)
EBITDA Margins (%)
EBIT Margins (%)
E:MOSL Estimates
(INR M)
1Q
923.2
-0.5
14.2
48.4
7.7
75.1
5.6
11.3
24.9
8.0
5.3
FY20
2Q
885.8
-18.6
14.3
49.1
7.0
73.4
5.4
12.5
26.6
8.8
5.9
3Q
4Q
1Q
266.9
-71.1
14.4
53.6
10.8
75.9
13.8
13.8
24.1
-3.4
-9.8
FY21E
2QE
848.4
FY20
3QE
913.4
4QE
853.8
3,263.5
FY21E
2,882.5
7.6
55.3
9.9
74.5
5.7
12.0
25.6
7.8
4.9
-17.0
14.3
50.2
821.5
-30.2
12.2
13.7
75.0
6.4
11.6
25.0
7.0
3.5
55.0
632.9
-4.2
11.2
55.3
34.9
56.5
-16.6
13.8
50.3
6.6
11.5
75.0
5.0
11.7
25.0
8.4
5.7
54.7
10.0
74.0
4.9
11.8
26.0
9.4
6.9
2.8
8.2
72.2
5.7
13.3
27.8
8.8
5.9
74.0
4.9
12.0
26.0
9.1
6.4
73.9
5.7
12.2
26.1
8.2
5.2
30 July 2020
2
 Motilal Oswal Financial Services
TVS Motor Company
Exhibit 1: Trend in volume and volume growth
Volumes ('000 units)
32.0
16.3 15.0
15.7 14.7 19.8
12.2
Growth (%)
2.0 (0.5)
(17.0)
(18.6)
(30.2)
(71.1)
Exhibit 2: Trend in blended realizations
Realizations (INR '000/unit)
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 3: Motorcycle, Scooter and overall market share trend
Motorcycles
25
20
15
10
5
0
Scooters
Overall
Source: Company, MOFSL
Exhibit 4: Net sales and growth trends
Net sales (INR b)
18.0 18.6 24.0
40.9
22.7 22.8 26.1
Growth (%)
9.5 7.1
(11.5)
(20.7)
(12.9)
(68.0)
Exhibit 5: Contribution of different segments in volume mix
Motorcycles
2
25
32
41
3
24
35
39
3
26
33
38
3
26
31
39
4
23
31
42
Scooters
4
22
36
39
4
22
36
38
5
24
30
41
Mopeds
4
19
32
45
5
19
38
39
3Ws
6
20
34
40
7
22
26
45
4
20
31
45
Source: Company, MOFSL
Source: Company, MOFSL
30 July 2020
3
 Motilal Oswal Financial Services
TVS Motor Company
Exhibit 6: EBITDA and EBITDA margin trend
EBITDA (INR m)
EBITDA margin (%)
Exhibit 7: PAT and its growth trajectory
PAT
Growth (%)
30.6 15.2
15.6
6.1 20.2 16.4
1.3
(0.9)
(17.0)(4.6) (7.6)
(27.8)
8.9 8.1
8.8 8.8
8.6 8.1 8.0
7.4 7.8
7.0
7.1
6.2
(3.4)
(197.7)
Source: Company, MOFSL
Source: Company, MOFSL
Key takeaways from earnings call
Demand outlook:
It expects demand recovery in 2H. Rural is faring better than
urban. TVSL expects to outperform the market owing to its strong portfolio.
The Scooter and Moped categories are seeing a good response post the BS6
launch. Apache saw major production constraints. This has improved substantially
in 2Q.
The company expects premiumization to continue, albeit delayed by one or two
quarters due to the COVID-19 impact. This should benefit Apache and Ntorq.
For the dealerships that are open, demand is back at pre-COVID-19 levels. At the
start of Jul’20, 85% of dealerships were operational. However, this has dropped to
75% due to fresh lockdowns in select markets.
Production bottlenecks prevailed in Jun’20, but are easing in Jul’20. Apache faced
severe production-related challenges, which impacted the mix in 1QFY21.
Inventory is much lower v/s the normal 30–35 days.
It took price hikes of 0.7% in 1QFY21, and has taken a 0.4% price hike in
2QFY21.The gross margin declined by 90bps QoQ in 1QFY21, led by: (1) the
reversal of finished goods inventory and (2) a weaker product mix (lower export
mix), partly offset by price hikes taken in 1QFY21 and cost-reduction initiatives.
Expect margins to improve in 2H, driven by cost cutting and focused market
strategy. Jun’20 EBITDA and PBT were positive, with July thus far faring even
better.
It took a price increase of 0.7% in 1QFY21 and 0.4% in Jul’20 in the domestic
market.
Interest cost increased due to additional borrowings in 1QFY21 to ensure timely
payment to suppliers. The company repaid additional borrowings; hence, net
debt is similar to Mar’20 levels.
Finance:
Finance penetration increased to 52% v/s 46% YoY. TVS Credit holds 54%
share of TVSL Financing. TVS Credit’s moratorium is currently at 14% (incl. Morat
2.0) v/s 37% earlier, backed by strong collection efforts. Collections are now at
pre-COVID-19 levels.
Capex
would be INR3b for FY21 and investment in TVS Credit would be
~INR750m.
30 July 2020
4
 Motilal Oswal Financial Services
TVS Motor Company
Valuation and view
Volumes to be impacted across businesses in FY21:
We expect FY21 to be
another year of challenges for the domestic 2W industry and for TVSL due to the
impact of the COVID-19 pandemic. As a result, TVSL should see some pressure in
export volumes as well. Its relatively weaker position in the Entry-level Bike
segment due to gaps in the product portfolio may lead to higher decline in the
Motorcycle segment v/s peers. However, we expect Scooter to outperform the
industry. We expect volumes to decline by 17.4% in FY21E and grow by 16.6% in
FY22E.
Volume outperformance, market share gains to slow:
We estimate TVSL’s
volume outperformance over the domestic 2W industry to slow as the gaps in the
product portfolio have largely been plugged. This was reflected in FY20 when
TVSL actually lost market share in the domestic 2W industry by ~100bp to ~13.8%.
Furthermore, in the current environment, we expect consumers to prefer strong
brands and segment leaders. This, coupled with the expectation of rural-led
recovery, does not augur well for market share gains in TVSL.
Scale to drive 90bp margin expansion over FY20–22E:
There are several levers to
improve margins: a) better mix, b) Fx benefit, c) cost-cutting initiatives, and d)
operating leverage (particularly on marketing and employee cost). Hence, we
estimate EBITDA margin expansion of 90bp (FY20–22E) to 9.3% by FY22E. This
would result in standalone EPS CAGR of ~22% over FY20–23E.
NBFC arm turns subsidiary to boost consolidated performance:
TVS Credit
Services (~85% subsidiary) is a fast-growing NBFC with a presence in financing for
2W, Used Car, Tractor, etc. The captive NBFC arm has been particularly helpful to
offset the impact of the liquidity crunch in the last 21 months. We value this NBFC
company at ~INR40/share (post 20% holdco discount).
Valuation and view:
We expect subdued volumes in 1HFY21 due to 12–15% cost
inflation for the BS6 compliance as well as the impact of COVID-19, with recovery
expected, at the earliest, in the festive season. We expect TVSL’s market share
gains to slow as there are now only limited product gaps in its portfolio.
Furthermore, the electrification of 2W could threaten TVSL’s competitive
positioning in Scooter as we expect this to be cannibalized by E-Scooter. We
upgrade our FY20/FY21 EPS by 2%/5% to INR10.3/17.5 to reflect demand
recovery. Valuation at 39.1x/22.9x FY21E/FY22E EPS is already reflecting the large
part of earnings recovery. Maintain
Neutral,
with TP of ~INR392 (18x Sep’22 EPS +
INR40/share for value in NBFC).
FY21E
FY22E
Exhibit 8: Revised estimates
(INR M)
Volumes (m units)
Net Sales
EBITDA
EBITDA (%)
Net Profit
EPS (INR)
Rev
2.88
159,471
12,518
7.8
4,887
10.3
Old
2.78
157,805
12,624
8.0
4,801
10.1
Chg (%)
3.7
1.1
-0.8
-20bp
1.8
1.8
Rev
3.37
188,755
17,554
9.3
8,329
17.5
Old
3.26
186,833
17,189
9.2
7,932
16.7
Chg (%)
3.6
1.0
2.1
10bp
5.0
5.0
Source:MOFSL
30 July 2020
5
 Motilal Oswal Financial Services
TVS Motor Company
Exhibit 9: TVS Credit Services – Valuable investment
INR M
Loan book
Loan book Gr (%)
Leverage (x)
RoA (%)
PAT
Net Worth
RoE (%)
P/B (x)
Equity Value
TVSLs Stake (%)
Value for TVSL @ Post 20% Hold Co Discount
Value for TVSL (INR/sh) @ 20% HoldCo
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20E
FY21E
FY22E
10,630
101
6.2
0.5
52
1,720
3.0
17,020
60
6.5
1.0
172
2,620
6.6
26,360
55
6.7
1.1
292
3,920
7.5
39,540
50
7.3
1.3
507
5,410
9.4
50,000
26
7.2
1.7
870
6,980
12.5
61,540
23
7.0
2.2
1,384
8,834
15.7
1
83,350
35
7.2
1.8
1,483
11,511
12.9
1
11,511
84.27
92,150
10.6
6.7
1.6
1,505
13,720
11.0
1
13,720
84.27
96,860 115,678
5
5.6
1.2
1,162
17,382
6.7
1
17,382
84.27
11,718
25
19
5.6
1.4
1,619
20,502
7.9
1.25
25,627
84.27
17,277
36
Source: Company, MOFSL
Exhibit 10: P/E band
P/E (x)
Min (x)
60.0
40.0
20.0
0.0
38.5
24.8
11.1
4.9
Avg (x)
+1SD
Max (x)
-1SD
54.8
31.7
Exhibit 11: P/BV band
P/B (x)
Min (x)
12.0
8.0
4.0
0.0
7.5
4.8
2.2
1.0
4.6
Avg (x)
+1SD
Max (x)
-1SD
11.3
Source: MOFSL
Source: MOFSL
30 July 2020
6
 Motilal Oswal Financial Services
TVS Motor Company
Stories in chart
Exhibit 12: Volume growth trajectory
22.4
5.4
Volumes (units)
18.6
9.1
13.0
Growth (%)
17.0
26.1
10.6
-16.6
-11.7
9.3
-9.8
-2.9
Exhibit 13: Revenues growth trend
Net sales (INR m)
25.1
20.0
Growth (%)
18.4
FY15
FY16
FY17
FY18
FY19
FY20
FY21E FY22E
FY15
FY16
FY17
FY18
FY19
FY20
FY21E FY22E
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 14: EBITDA margins trending upwards
EBITDA (INR m)
7.7
7.9
EBITDA margin (%)
9.3
7.3
6.0
7.1
8.2
7.8
Exhibit 15: Trend in PAT and PAT growth
PAT (INR m)
33.4
40.7
14.1
18.7
1.1
(15.4)(13.8)
Growth (%)
70.4
FY15
FY16
FY17
FY18
FY19
FY20
FY21E FY22E
FY15
FY16
FY17
FY18
FY19
FY20
FY21E FY22E
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 16: FCF to remain strong despite high capex plans
CFO (INR b)
Capex (INR b)
FCF (INR b)
Exhibit 17: Sharp improvement in return ratios
27.2
22.7
RoCE (%)
25.6
25.1
21.5
16.3
21.9
25.7
13.0
23.8
24.5
23.5
17.1
20.1
13.7
19.8
RoE (%)
-3.7
FY15
-4.9
FY16
-6.1
FY17
-7.7
FY18
-7.3
FY19
-3.0
-7.3
FY20
-6.5
FY21E FY22E
FY15
FY16
FY17
FY18
FY19
FY20
FY21E FY22E
Source: Company, MOFSL
Source: Company, MOFSL
30 July 2020
7
 Motilal Oswal Financial Services
TVS Motor Company
Key operating metrics
Snapshot of Revenue model
units
Motorcycle
Growth (%)
% of total vols
Scooter
Growth (%)
% of total vols
Moped
Growth (%)
% of total vols
Total 2Ws
Growth (%)
% of total vols
3Ws
Growth (%)
% of total vols
Domestic
Growth (%)
% of total vols
Exports
Growth (%)
% of total vols
Total volumes
Growth (%)
ASP (INR/unit)
Growth (%)
Net Sales (INR m)
Growth (%)
FY16
1,016,807
6.2
38.0
812,527
15.0
30.3
738,547
-3.5
27.6
2,567,881
5.7
95.9
110,821
-1.8
4.1
2,224,902
4.8
83.1
453,800
8.3
16.9
2,678,702
5.4
41,455
4.9
111,047
10.6
FY17
1,067,803
5.0
36.5
870,863
7.2
29.8
910,519
23.3
31.1
2,853,885
11.1
97.6
69,254
-37.5
2.4
2,502,050
12.5
85.6
421,089
-7.2
14.4
2,923,139
9.1
41,515
0.1
121,353
9.3
FY18
1,329,105
24.5
38.3
1,134,918
30.3
32.7
876,932
-3.7
25.3
3,367,426
18.0
97.2
98,684
42.5
2.8
2,891,895
15.6
83.4
574,215
36.4
16.6
3,466,110
18.6
43,782
5.5
151,754
25.1
FY19
1,539,226
15.8
39.3
1,301,115
14.6
33.2
896,917
2.3
22.9
3,758,551
11.6
96.0
156,434
58.5
4.0
3,153,247
9.0
80.5
761,738
32.7
19.5
3,914,985
13.0
46,513
6.2
182,099
20.0
FY20
1,352,237
-12.1
41.4
1,073,459
-17.5
32.9
648,944
-27.6
19.9
3,089,557
-17.8
94.7
173,911
11.2
5.3
2,422,650
-23.2
74.2
840,818
10.4
25.8
3,263,468
-16.6
50,325
8.2
164,233
-9.8
FY21E
1,144,410
-15.4
39.7
1,000,080
-6.8
34.7
579,332
-10.7
20.1
2,740,112
-11.3
95.1
142,368
-18.1
4.9
2,132,634
-12.0
74.0
749,846
-10.8
26.0
2,882,480
-11.7
55,324
9.9
159,471
-2.9
FY22E
1,367,843
19.5
40.5
1,188,581
18.8
35.2
636,560
9.9
18.9
3,210,902
17.2
95.2
162,960
14.5
4.8
2,503,226
17.4
74.2
870,636
16.1
25.8
3,373,862
17.0
55,946
1.1
188,755
18.4
30 July 2020
8
 Motilal Oswal Financial Services
TVS Motor Company
Financials and Valuations
Standalone - Income Statement
Y/E March
Volumes (units)
Growth (%)
Net Sales
Change (%)
EBITDA
Margin (%)
Depreciation
EBIT
Int. and Finance Charges
Other Income - Rec.
PBT bef. EO Exp.
EO Expense/(Income)
PBT after EO Exp.
Current Tax
Deferred Tax
Tax Rate (%)
Reported PAT
PAT Adj for EO items
Change (%)
FY16
2,678,702
6.4
111,047
10.6
8,099
7.3
2,361
5,738
487
1,039
6,289
0
6,289
1,397
0
22.2
4,893
4,893
40.7
FY17
2,923,139
9.1
121,353
9.3
8,571
7.1
2,878
5,693
440
1,734
6,987
0
6,987
1,406
0
20.1
5,581
5,581
14.1
FY18
3,466,110
18.6
151,754
25.1
11,750
7.7
3,387
8,362
566
990
8,786
0
8,786
1,971
190
24.6
6,626
6,626
18.7
FY19
3,914,985
13.0
182,099
20.0
14,333
7.9
3,993
10,340
806
75
9,610
0
9,610
2,768
141
30.3
6,701
6,701
1.1
FY20
3,263,468
(16.6)
164,233
-9.8
13,459
8.2
4,890
8,568
1,022
321
7,867
323
7,544
2,339
-717
21.5
5,923
5,669
-15.4
FY21E
2,882,480
(11.7)
159,471
-2.9
12,518
7.8
4,719
7,799
1,415
133
6,517
0
6,517
1,630
0
25.0
4,887
4,887
-13.8
FY22E
3,373,862
17.0
188,755
18.4
17,554
9.3
5,460
12,094
1,123
146
11,118
0
11,118
2,788
0
25.1
8,329
8,329
70.4
(INR M)
Standalone - Balance Sheet
Y/E March
Equity Share Capital
Total Reserves
Net Worth
Deferred Liabilities
Total Loans
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Capital WIP
Total Investments
Curr. Assets, Loans&Adv.
Inventory
Account Receivables
Cash and Bank Balance
Loans and Advances
Curr. Liability & Prov.
Account Payables
Provisions & other CL
Net Current Assets
Appl. of Funds
E: MOSL Estimates
FY16
475
19,108
19,583
1,437
7,585
28,606
34,651
17,456
17,196
310
12,703
19,315
6,964
5,781
327
6,243
20,916
17,593
3,323
-1,602
28,606
FY17
475
23,608
24,083
1,257
11,072
36,413
39,290
19,451
19,839
623
15,880
22,705
9,670
7,238
85
5,713
22,634
19,169
3,465
71
36,412
FY18
475
28,329
28,804
1,482
12,432
42,718
45,454
21,736
23,719
1,311
20,355
26,177
9,644
9,684
109
6,741
29,077
25,762
3,315
-2,900
42,485
FY19
475
32,998
33,473
2,126
14,000
49,600
50,536
24,743
25,793
2,572
23,008
32,320
11,759
14,141
439
5,981
34,094
32,912
1,183
-1,774
49,600
0.0
FY20
475
35,706
36,181
1,581
20,219
57,981
58,077
29,077
28,999
2,854
28,554
33,204
10,389
12,814
4,193
5,808
35,631
33,869
1,763
-2,427
57,981
0.0
FY21E
475
38,592
39,067
1,581
20,219
60,867
62,931
33,797
29,134
1,000
31,054
33,097
10,088
12,233
4,438
6,337
33,418
31,656
1,763
-322
60,867
0.0
(INR M)
FY22E
475
44,635
45,111
1,581
17,219
63,910
69,431
39,257
30,174
1,000
33,254
37,794
11,941
14,480
4,591
6,783
38,313
36,550
1,763
-518
63,910
0.0
30 July 2020
9
 Motilal Oswal Financial Services
TVS Motor Company
Financials and Valuations
Ratios
Y/E March
Basic (INR)
EPS
Growth (%)
Cash EPS
BV/Share
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
EBITDA Margins (%)
Net Profit Margins (%)
RoE
RoCE
RoIC
Operating Ratios
Fixed Asset Turnover (x)
Inventory (Days)
Debtor (Days)
Creditor (Days)
Working Capital (Days)
Leverage Ratio (x)
Current Ratio
Debt/Equity
FY16
10.3
40.7
15.3
41.2
2.5
28.9
39.0
26.3
9.8
1.8
24.5
0.6
7.3
4.4
27.2
25.7
25.1
3.2
22.9
17
58
-6
0.9
0.4
FY17
11.7
14.1
17.8
50.7
2.5
25.6
34.2
22.6
7.9
1.7
23.6
0.6
7.1
4.6
25.6
23.8
23.3
3.1
29.1
20
58
0
1.0
0.5
FY18
13.9
18.7
21.1
60.6
3.3
28.4
28.8
19.1
6.6
1.3
17.3
0.8
7.7
4.4
25.1
24.5
27.7
3.3
23.2
23
62
-7
0.9
0.4
FY19
14.1
1.1
22.5
70.5
3.5
29.8
28.5
17.9
5.7
1.1
14.3
0.9
7.9
3.7
21.5
23.5
27.6
3.6
23.6
28
66
-4
0.9
0.4
FY20
11.9
-15.4
22.2
76.2
3.5
33.8
33.7
18.1
5.3
1.3
15.4
0.9
8.2
3.5
16.3
17.1
21.1
2.8
23.1
28
75
-15
0.9
0.6
FY21E
10.3
-13.8
20.2
82.2
3.5
40.9
39.1
19.9
4.9
1.3
16.5
0.9
7.8
3.1
13.0
13.7
18.9
2.5
23.1
28
72
-11
1.0
0.5
FY22E
17.5
70.4
29.0
94.9
4.0
27.4
22.9
13.9
4.2
1.1
11.6
1.0
9.3
4.4
19.8
20.1
32.0
2.7
23.1
28
71
-10
1.0
0.4
Standalone - Cash Flow Statement
Y/E March
NP/ (Loss) bef Tax and EO
Depreciation
Interest & Finance Charges
Direct Taxes Paid
(Inc)/Dec in WC
Others
CF from Operations
(inc)/dec in FA
Free Cash Flow
CF from Investments
(Inc)/Dec in Debt
Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
Free Cash Flow
FY16
6,289
2,361
92
1,458
1,382
745
9,411
-4,887
4,524
-6,097
-461
-461
-2,065
-3,061
253
1,588
1,842
4,524
FY17
6,987
2,878
440
1,290
-514
-1,261
7,239
-6,123
1,117
-7,481
2,792
-433
-1,430
-727
-969
1,320
350
1,117
FY18
8,786
3,387
582
2,465
2,977
-294
12,973
-7,698
5,276
-11,314
1,917
-582
-1,887
-747
912
-2,288
-1,376
5,276
FY19
9,610
3,993
857
2,300
-1,097
-85
10,978
-7,334
3,643
-10,023
939
-857
-2,000
811
1,766
-1,376
390
3,643
FY20
7,544
4,890
1,022
1,850
2,926
-596
13,936
-7,267
6,669
-12,889
4,013
-1,003
-2,000
2,705
3,753
390
4,143
6,669
FY21E
6,517
4,719
1,415
1,630
-1,860
-133
9,028
-3,000
6,028
-5,367
0
-1,415
-2,000
-3,416
245
4,193
4,438
6,028
(INR M)
FY22E
11,118
5,460
1,123
2,788
349
-146
15,116
-6,500
8,616
-8,554
-3,000
-1,123
-2,286
-6,409
153
4,438
4,591
8,616
30 July 2020
10
 Motilal Oswal Financial Services
TVS Motor Company
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
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1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
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8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
30 July 2020
11
 Motilal Oswal Financial Services
TVS Motor Company
10 MOFSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
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actual/beneficial ownership of 1% or more securities in the subject company
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though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
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Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website
www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West),
Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412.
AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC):
PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management Ltd. (MOWML):
PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds,
PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of
MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory services is backed by
proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns.
Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID:
na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
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