X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
TVS: A re-look at fundamentals - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Nov 18, 2002

    TVS: A re-look at fundamentals

    Buoyed by robustness in motorcycle demand, stock markets have been bullish on two-wheeler stocks like TVS, Bajaj Auto and Hero Honda. But the time has come to take a re-look at fundamentals. Here we analyse TVS’s growth prospects.

    After losing market share to peers like Hero Honda and Bajaj Auto, TVS has gained share in the motorcycle segment on the back of some new launches. Apart from adopting an aggressive pricing strategy for its low-end model viz. ‘Max 100-R’, TVS introduced its indigenously developed motorcycle, ‘Victor’, in FY02. Consequently, the company’s market share in the motorcycle segment increased to 18% in 1QFY03. We expect TVS’s market share to touch 20% in the next two years.

    Apart from volumes, contribution from higher end models like ‘Victor’ and ‘Fiero’ has increased significantly in the last two years. Our estimates suggest that both the aforesaid models accounted for as high as 35% of volumes in FY02 (Victor accounted for 16%). Considering the robustness in ‘Victor’ sales, the company is expected to benefit from better price realisations in future. TVS is also slated to launch a renewed ‘Fiero’ soon.

    At the same time, moped and scooter segments still contribute to 32% of sales for TVS. Given the fact that both the segments are witnessing a consistent fall in demand in light of a slowdown in the economy and change in consumer preference towards motorcycles, growth prospects are challenging. We expect the moped segment to register a 15% drop in volumes in FY03.

    The company intends to spend in excess of Rs 5 bn as capital expenditure towards research and development facilities, capacity expansion and strengthening its distribution network. Given the competitive nature of the two-wheeler industry, revenues may not be commensurate with capital spending in the immediate term and thus could put pressure on profits.

    The stock currently trades at Rs 401 implying a P/E multiple of 7.1x FY04E earnings. While valuations may look attractive, considering the company’s regional presence and increased competitive pressure, the medium-term prospects are challenging. This could one of the reasons why the stock is languishing at Rs 380-Rs 420 levels since August 2002, despite increased volume growth.

    For more detailed analysis with projections, view our complete research report on TVS

     

     

    Equitymaster requests your view! Post a comment on "TVS: A re-look at fundamentals". Click here!

      
     

    More Views on News

    TVS Motor: Inventory Push Erodes Margins! (Quarterly Results Update - Detailed)

    May 22, 2017

    TVS Motor Company ltd has announced its financial results for the fourth quarter of the financial year 2016-17 (4QFY17).

    TVS Motor: Demonetisation Negates the Festive Growth (Quarterly Results Update - Detailed)

    Feb 17, 2017

    TVS Motor Company has announced its financial results for the third quarter of the financial year 2016-17 (3QFY17).

    TVS Motor Company Ltd: Good Festive Season, Exports Under Pressure (Quarterly Results Update - Detailed)

    Oct 28, 2016

    Good Festive Season, Exports Under Pressure!

    Tata Motors Ltd: Another Disappointing Quarter, Management fails to Perform! (Quarterly Results Update - Detailed)

    Aug 14, 2017

    Tata Motors Ltd disappoints again for both India and JLR business. Management commentary indicates a slow year ahead.

    Maruti Suzuki Ltd: Bumpy First Quarter. GST dents Margins! (Quarterly Results Update - Detailed)

    Aug 2, 2017

    GST realted cost impacts Margins, Management expects good year ahead.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    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: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    TVS MOTORS SHARE PRICE


    Aug 22, 2017 03:13 PM

    TRACK TVS MOTORS

    • Track your investment in TVS MOTORS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    TVS MOTORS 8-QTR ANALYSIS

    Detailed Quarterly Results With Charts

    COMPARE TVS MOTORS WITH

    MARKET STATS