TVS Motor Co. Q3 net down -12.66% yoy at Rs247.75cr on high inventory costs for the autos vertical

7 Feb 2022 , 06:44 PM

TVS Motor Co. reported 8.24% yoy growth in total sales revenues for the Dec-21 quarter on consolidated basis at Rs6,597cr. On a sequential basis, the revenues were up by 1.76%.

During the December 2021 quarter, total two wheeler sales were lower -12.3% at 8.35 lakh units. If you break up the total revenue numbers, then pressure came from scooters.

For instance, exports grew 12% yoy while motorcycle sales were up 4.7% at 4.46 lakh units. However, scooter sales fell by -17.7% at 2.56 lakh units. Three wheeler sales in the quarter were marginally higher on a yoy basis.

For the Dec-21 quarter, the operating profits were down on a yoy basis by -3.93% at Rs580cr. During the quarter, the automobile segment saw a spike inventory costs due to the microchip shortage forcing more investments in inventory.

In terms of verticals, the automotive vehicles business saw -6.2% fall in EBIT at Rs346cr while the automotive components business dipped into an operating loss. The situation was redeemed by the financial services which saw EBIT grow 30% at Rs73cr in Q3.

Operating margins tapered on the back of higher inventory costs from 9.90% in Dec-20 quarter to 8.79% in the Dec-21 quarter. Operating margins were higher on a sequential basis by 19 bps

Net Profit after tax (PAT) for the Dec-21 quarter was down -12.66% yoy at Rs247.75r on the back of the operating pressures getting transmitted to the bottom line.

PAT margins tapered from 4.65% in the Dec-20 quarter to 3.76% in the Dec-21 quarter. The PAT margins were almost flat on a sequential basis, although the net margins of TVS Motors is among the lowest in the two-wheeler industry.

Financial highlights for Dec-21 compared yoy and sequentially

	TVS Motor Co.
Rs in Crore	Dec-21	Dec-20	YOY	Sep-21	QOQ
Total Income (Rs cr)	₹ 6,597.35	₹ 6,094.91	8.24%	₹ 6,483.42	1.76%
Operating Profit (Rs cr)	₹ 579.82	₹ 603.53	-3.93%	₹ 557.49	4.01%
Net Profit (Rs cr)	₹ 247.75	₹ 283.65	-12.66%	₹ 242.17	2.30%
Diluted EPS (Rs)	₹ 5.21	₹ 5.97		₹ 5.10
Operating Margins	8.79%	9.90%		8.60%
Net Margins	3.76%	4.65%		3.74%