TVS Motor Company Q1FY27: Built for the tough days

研报英文原文证据摘录

TVS Motor Company Q1FY27: Built for the tough days

130bps QoQ and 160bps YoY, while staff costs declined 20bps QoQ From To % ch Cons.

and 90bps YoY, other expenses declined by 90bps QoQ and 100bps YoY, helping offset 03/27E 103.46 106.36 3 93.19

commodity cost pressures. As a result, EBITDA margin declined by only 30bps QoQ and 03/28E 130.73 134.02 3 115.90

improved by 60bps YoY to 12.8%, compared with our and Street estimate of 12.0%. 03/29E 160.70 160.23 -0 135.06

Key earnings call takeaways Pramod Kumar

Analyst

1) The company expects double-digit industry growth in FY27, with Q2 likely to be pramod.kumar@ubs.com

similar to or slightly better than Q1; EV growth to remain significantly ahead of industry +91-22-6155 6063

growth; 2) Export momentum remains robust, with management expecting growth to

Vedant Kshatriya

sustain on the back of strong demand in Africa, LATAM and Asia, alongside capacity

Associate Analyst

expansion and premium product launches; 3) Management indicated commodity costs vedant.kshatriya@ubs.com

increased by ~3.5% in Q1FY27 and expects a ~0.5% increase in Q2FY27, while the +91-22-6155 6008

company has taken ~1.5% price hikes in Q1 and plans an additional ~0.5% price

increase in Q2; 4) The company is investing ~Rs3.5bn to expand 2W capacity from

6.8mn to 8.3mn units and 3W capacity from 0.25mn to 0.42mn units to support strong

demand; 5) TVS Credit's loan book grew 19% YoY to Rs320.5bn, with PBT up 16% YoY

to Rs2.8bn, supported by deeper rural penetration; 6) Management remains optimistic

on Norton, with the Atlas and Manx platforms now entering key global markets (UK,

Europe, India and later the US).

Valuation: Retain Buy and raise PT to Rs 4,925

We value core business at 22x 1Y fwd EV/EBITDA (c.0.9x PEG). We assign Rs345/share of

value for inv.