TVS Suzuki Ltd has reported a net profit of Rs 206 m for the 1QFY01, which is a decline of 3% YoY. The company's sales grew by 24% to Rs 4,526 m for the 1QFY01 on the back of robust volumes and realisations. However operating margins declined by 260 basis points to 9.1% in the 1QFY01, due to higher operating expenses. These higher expenses can be attributed to increase in raw material and marketing expenses due to new product launches.
TVS Suzuki is a joint venture between Sundaram Clayton (TVS group) and Suzuki Motors, Japan. The company has a presence in all the two wheeler segments. The company's dynamic management, product launches, technical superiority and a well established network are its strengths. It reported a sales of Rs 16.2 bn for FY2000.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Diluted number of shares
Diluted Earnings per share*
The company's net margins fell to 4.6% in the 1QFY01 from 5.8% in the 1QFY00. This is due to a rise in depreciation costs by 35% YoY due to higher capital expenditure during the year.
During FY2000, the company launched the 4 stroke Suzuki Fiero in the motorcycle segment and the XL Super Heavy Duty in the moped segment. These launches have resulted in higher raw material and marketing costs for the company and have put a pressure on its operating margins in the current year. During FY2001 the company has launched the TVS Sport, a moped aimed at the urban consumer.
TVS Suzuki volumes up 13% YoY in the 1QFY01
(no. of units sold)
The company's motorcycle and scooter sales for the 1QFY01 have done well. In the motorcycle segment the 4 stroke 150 cc bike the 'SUZUKI FIERO', volumes crossed 4,000 in June'2000. This bike is currently available in Maharashtra, Karnataka, Kerala, Rajasthan and Delhi. The company is stepping up its production of this bike as it plans to launch this in other states as well.
On the current price of Rs 233, TVS Suzuki is trading at 6.1x FY2000, EPS of Rs 37.9.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407