Mumbai: Chennai-based two- and three-wheeler maker TVS Motor’s profits narrowed by a quarter year-on-year during the July-September period but fared better than street estimates on the back of better cost control and a richer product mix.
The company reported a profit of Rs 196 crore against expectations of Rs 183 crore for the September quarter. This was a decline of 23% over the same period last year when the company had booked an exceptional gain of Rs 76 crore.
Revenue improved by 5.9% year-on-year to Rs 4,605 crore, short of the expectations of Rs 4,654 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) improved 12.6% to Rs 430 crore. EBITDA margin grew 55 basis points to 9.3%.
The company sold 868,000 vehicles during the quarter including exports, down 2% year-on-year. While the sales of motorcycles and mopeds grew by 7% and 19%, respectively, scooter and three-wheeler sales declined by 19% and 23%.
“TVS delivered a strong performance in Q2FY21. We expect improvement in the two-wheeler industry would continue despite near term hiccups. The domestic industry would witness a sequential as well as Y-o-Y improvement in the second half of FY21 with a decent bounce back,” said Mitul Shah, Head of Research at Reliance Securities. The company has a strong product basket and an improving brand equity, he said.
“Despite COVID-19 challenges, the company strengthened its supply chain during the second quarter of 2020-21. The production and sales improved consistently from July 2020 onwards,” TVS Motor said in a statement.