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TVS Motor Q2FY22 Result & Earning Call Highlights- Cost reduction and increase in premiumization

TVS Motor Q2FY22 Result & Earning Call Highlights- Cost reduction and increase in premiumization

Published on 25 October 2021 Views 12 Comments 0

Standalone Highlights

  • The revenue from operations for the company stood at Rs. 5,619 crores. A YoY growth of 34.6% and QoQ growth of 42.8%. This was the highest ever revenue for the company in Q2.
  • The revenue growth was achieved by the company through various cost reduction initiatives and increase in premium mix in the volumes.
  • Operating Profit for the company stood at Rs. 566 crores in Q2FY22 as compared to Rs. 441 crores in Q2FY21, a growth of 28.3%.
  • Operating Profit Margin stood at 10.1% as compared to 9.6% in Q2FY21 and 7.0% in Q1FY22.
  • The PBT of the company grew by 41.2% YoY and stood at Rs. 377 crores.
  • PAT increased by 41.8% YoY and stood at Rs. 278 crores after a subdued Q1FY22 performance.
  • The Free Cash Flow for the company stood at Rs. 1,090 crores in Q2FY22.


Consolidated Highlights

  • The revenue from operations for the company stood at Rs. 6,483 crores. A YoY growth of 23.4% and QoQ growth of 38.3%.
  • Export revenues stood at Rs. 1,834 crores.
  • Operating Profit for the company stood at Rs. 748 crores in Q2FY22 as compared to Rs. 649 crores in Q2FY21, a growth of 15.3%.
  • Operating Profit Margin stood at 11.5% as compared to 12.3% in Q2FY21 and 8.9% in Q1FY22.
  • The PBT of the company grew by 32.6% YoY and stood at Rs. 342 crores.
  • PAT increased by 34.4% YoY and stood at Rs. 242 crores after a subdued Q1FY22 performance due to TVS Singapore and TVS Credit Services.


Volumes

  • The volumes of the company stood at 9.16 lakh units as compared to 8.67 lakhs in Q2FY22.
  • The company sold total 8.70 lakh units of two-wheelers in Q2FY22.
  • Two wheeler exports also grew by almost 46% in Q2FY22 and stood at 4.39 lakh units.
  • Scooter sales stood at 2.66 lakhs as compared to 2.70 lakhs in Q2FY21.


Earnings call Highlights

Business Highlights

  • The company faced challenges in the form of increase in commodity cost, scarcity of containers and semiconductor shortages in Q2FY22.
  • Significant cost reduction initiatives and premiumisation led to growth in revenue.
  • BMW 310 Series crossed 1,00,000 marks in less than 5 years.
  • Excellent feedback for the new products, TVS Rider and TVS Jupiter 125.
  • Mix of premium product grew to almost 34%.
  • The company lost Apache sales of 25k due to semiconductor shortages.
  • Product mix, premiumisation, cost reduction initiatives and price increases managed the increase in material cost.
  • Focused working capital and good operating performance resulted in FCF 1,090 crores.
  • Gained 2% market share in VAAHAN.
  • Stable crude oil prices.
  • Bangladesh in opening from restrictions and Sri Lanka is relaxing restrictions.
  • Container availability remains a challenge.
  • 3 wheeler demand is robust and confident to grow more than industry.
  • Price increase in Oct of about 1.1% due to Commodity Pressure.
  • The company expects demand improvement in Diwali season.
  • CAPEX for this FY will Rs. 750 crores.


Electric Vehicle

  • Positive response to TVS IQube Electric. 33 cities launch. Planning to reach across the country by end of FY. Creating capacity of 10,000 pm in last quarter this year. Aggressive plan for FY23.
  • The company is targeting 10,000 per month units of IQube electric from Jan-22.
  • The company is investing more than Rs. 1,000 crores for EV portfolio.
  • Strategic partnership with Tata Power to setup EV charging infrastructure across country.
  • The company will form a separate subsidiary under TVS Motors to operate EV business.
  • The company is Eligible for PLI scheme announced for EV vehciles.
  • The company does not see cannibalisation from EV for scooters within its product offerings.

 
Acquisitions and Investments

  • The company has acquired majority of the stake in European e-bike EGO Movement through TVS Singapore. This acquisition is a part of overall strategy to expand into Global market. EGO is a Swiss technology company provides mobility solution through portfolio of e-bike, e-cargo bikes and e-scooters.
  • Investments during Q2FY22. EGO Rs. 140 crores, Norton Rs. 150 crores. TVS Credit services Rs. 100 crores.
  • Strategic investment in Supply chain. Rs. 130 crores at 2%-3%.

Originally Published On: https://blog.investyadnya.in/tvs-motors-company-q2fy22-results/
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