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2QFY2012 Result Update | Automobile

November 3, 2011

TVS Motor
Performance Highlights
Y/E March (` cr) Net sales EBITDA EBITDA margin (%) Reported PAT
Source: Company, Angel Research

ACCUMULATE
CMP Target Price
% chg (yoy) 23.2 28.7 29bp 39.7 Angel est. 1,978 128 6.5 67 % diff 0.7 7.8 46bp 13.8

`66 `74
12 Months

2QFY12 1,992 138 6.9 77

2QFY11 1,616 107 6.7 55

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

Automobile 3,150 1.3 87/44 535,036 1 17,482 5,266 TVSM.BO TVSL@IN

TVS Motors (TVSL) 2QFY2012 operating results were ahead of our estimates, driven largely by better-than-expected margin performance. Bottom line came in 13.8% ahead of our estimates, led by operating margin expansion and a decline in interest cost. We continue to maintain our volume estimates at 2.3m/2.6mn for FY2012E/13E. However, we revise upwards our margin estimates to factor in the recent price increases (~1% and ~3.5% in domestic and exports markets) and softening commodity prices. We maintain our Accumulate rating on the stock. Net profit ahead of estimates on better-than-expected operating performance: TVSL registered strong 23.2% yoy (14.1% qoq) top-line growth to `1,992cr, in-line with our estimates, led by healthy 15.1% yoy (12.7% qoq) growth in total volumes and strong 6.7% yoy (1.5% qoq) growth in net average realization. The scooters segment continued to drive total volume growth, posting 26.6% yoy (34% qoq) growth, while the motorcycle segment witnessed a healthy 14.2% yoy (11% qoq) increase in volumes. The companys EBITDA margin came in 46bp ahead of our estimates at 6.9%, witnessing an expansion of 29bp yoy (24bp qoq). EBITDA margin expansion was aided by improvement in net average realization and a 120bp yoy savings in other expenditure. However, high raw-material cost (rawmaterial to sales ratio at 75.5% vs. 73.7% in 2QFY2011 and 76.4% in 1QFY2012) restricted further expansion in margins. Led by strong operating performance and lower interest cost, net profit posted better-than-expected growth of 39.7% yoy (30.1% qoq) to `77cr. Outlook and valuation: At `66, TVSL is trading at 10.8x FY2013E earnings. We maintain our Accumulate view on the stock and value it at 12x (20% discount to the multiple of the top two industry players at 15x) FY2013E earnings to arrive at a target price of `74. However, continued investments in subsidiaries are a concern going ahead.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 59.3 21.7 5.0 14.0

Abs. (%) Sensex TVS Motor

3m (4.9) 24.5

1yr 1.1

3yr 69.1

(12.5) 341.1

Key financials
Y/E March (` cr) Net sales % chg Adj. profit % chg Adj. OPM (%) EPS (`) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2010 4,363 18.9 119.9 306.6 4.2 2.5 26.3 3.6 14.3 4.4 0.8 17.7

FY2011 6,179 41.6 205.9 71.8 6.2 4.3 15.3 3.2 22.1 15.2 0.5 8.3

FY2012E 7,459 20.7 264.5 28.4 6.7 5.6 11.9 2.7 24.5 21.4 0.4 6.0

FY2013E 8,529 14.4 292.5 10.6 6.4 6.2 10.8 2.3 23.0 21.4 0.3 5.2

Yaresh Kothari
022-39357800 Ext: 6844 yareshb.kothari@angelbroking.com

Please refer to important disclosures at the end of this report

TVS Motor | 2QFY2012 Result Update

Exhibit 1: Quarterly financial performance


Y/E March (` cr) Net Sales Consumption of RM (% of Sales) Staff Costs (% of Sales) Purchase of traded goods (% of Sales) Other Expenses (% of Sales) Total Expenditure Operating Profit OPM Interest Depreciation Other Income PBT (excl. Extr. Items) Extr. Income/(Expense) PBT (incl. Extr. Items) (% of Sales) Provision for Taxation (% of PBT) Reported PAT PATM Equity capital (cr) EPS (`)
Source: Company, Angel Research

2QFY12 1,992 1,433 72.0 94 4.7 40 2.0 287 14.4 1,854 138 6.9 11 29 2 101 101 5.1 24 24.1 77 3.8 47.5 1.6

2QFY11 1,616 1,143 70.7 85 5.2 29 1.8 252 15.6 1,509 107 6.7 14 28 2 68 68 4.2 13 19.2 55 3.4 47.5 1.2

yoy chg (%) 23.2 25.4 10.7 38.4 13.5 22.9 28.7 (21.6) 2.2 (7.2) 48.8 48.8

1QFY12 1,746 1,272 72.9 91 5.2 32 1.8 234 13.4 1,629 117 6.7 12 28 0 78 78 4.5 19 24.5

qoq chg (%) 14.1 12.6 3.2 24.2 22.7 13.8 18.1 (3.7) 3.3 11,450 29.5 29.5 27.8 (1.4) 30.1

1HFY12 3,738 2,706 72.4 185 4.9 72 1.9 520 13.9 3,482 255 6.8 23 56 2 179 179 4.8 43 24.3 135 3.6 47.5

1HFY11 3,009 2,138 71.1 158 5.2 47 1.6 469 15.6 2,812 197 6.6 31 55 7 118 118 3.9 23 19.5 95 3.2 47.5 2.0

chg (%) 24.2 26.6 17.2 51.5 10.9 23.8 29.5 (27.1) 3.1 (65.4) 51.2 51.2

39.7

59 3.4 47.5

42.2

39.7

1.2

30.1

2.8

42.2

November 3, 2011

TVS Motor | 2QFY2012 Result Update

Exhibit 2: Quarterly volume performance


(unit) Total volumes Domestic Exports Motorcycles Domestic Exports Total motorcycles Scooters Domestic Exports Total scooters Mopeds Domestic Exports Total mopeds Three-wheelers Domestic Exports Total three-wheelers
Source: Company, Angel Research

2QFY12 604,208 519,709 84,499 174,877 63,867 238,744 148,344 9,121 157,465 192,859 3,478 196,337 3,629 8,033 11,662

2QFY11 524,954 462,949 62,005 157,216 51,790 209,006 119,028 5,328 124,356 180,294 1,342 181,636 6,411 3,545 9,956

yoy chg 15.1 12.3 36.3 11.2 23.3 14.2 24.6 71.2 26.6 7.0 159.2 8.1 (43.4) 126.6 17.1

1QFY12 536,131 458,329 77,802 155,793 59,258 215,051 109,279 8,244 117,523 190,672 1,461 192,133 2,585 8,839 11,424

qoq chg 12.7 13.4 8.6 12.2 7.8 11.0 35.7 10.6 34.0 1.1 138.1 2.2 40.4 (9.1) 2.1

1HFY12 1,140,339 978,038 162,301 330,670 123,125 453,795 257,623 17,365 274,988 383,531 4,939 388,470 6,214 16,872 23,086

1HFY11 988,794 870,868 117,926 309,430 99,934 409,364 211,223 8,619 219,842 337,882 3,951 341,833 12,333 5,422 17,755

% chg 15.3 12.3 37.6 6.9 23.2 10.9 22.0 101.5 25.1 13.5 25.0 13.6 (49.6) 211.2 30.0

Net sales driven by healthy volume and strong net average realization growth: TVSL registered strong 23.2% yoy (14.1% qoq) growth in its top line to `1,992cr, in-line with our estimates, led by healthy 15.1% yoy (12.7% qoq) growth in total volumes and strong 6.7% yoy (1.5% qoq) growth in net average realization. The scooters segment continued to drive total volume growth, posting 26.6% yoy (34% qoq) growth, while the motorcycle segment witnessed a healthy 14.2% yoy (11% qoq) increase in volumes. The three-wheeler segment registered 17.1% yoy growth (2.1% qoq) during the quarter. Exports volume sustained its strong growth traction, reporting 36.3% yoy (8.6% qoq) growth. Improvement in net average realization can be attributed to price increases (average price hike of ~1.5% in July 2011) and superior product mix (higher proportion of scooters to total sales).

Exhibit 3: Volume growth led by scooters and exports


(units) 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0
6.3 21.9 29.8 32.8 39.9 33.4 27.4 15.6

Exhibit 4: Net average realization improves 6.7% yoy


(`) 33,000 32,000 31,000 30,000 29,000 28,000 27,000 26,000
3.3 3.2 3.0 6.8 5.7 7.6 5.7

Total volume

yoy growth (RHS)

(%) 45.0 40.0 35.0 30.0 25.0 20.0 15.0 15.1 10.0 5.0 0.0

Net average realisation

yoy growth (RHS)


7.8

(%) 9.0 8.0 7.0 6.7 6.0 5.0 4.0 3.0 2.0 1.0 0.0

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Source: Company, Angel Research

2QFY12

Source: Company, Angel Research

November 3, 2011

2QFY12

TVS Motor | 2QFY2012 Result Update

Exhibit 5: In-line net sales growth of 23.2% yoy


(` cr) 2,500 2,000 1,500 1,000 500 0
11.3 27.7 36.3 40.9 51.1 43.0 34.3 25.3

Exhibit 6: Domestic market share trend


(%) 60.0 50.0 40.0 30.0
23.2

Net sales (LHS)

Net sales growth (RHS)

(%) 25 20
15.2 23.5

Scooters Three Wheelers 20.8 14.2 19.6 14.7 7.3 21.6 23.7

Motor Cycles Total Two Wheelers 21.2 14.7 20.5 14.3 15.2 22.8

17.7 13.8

15 10 5 0
2.6 6.8

15.4

15.4

20.0 10.0

6.2

6.6

7.1

6.9

6.8

6.3

6.8

0.0

2.5

4.5

5.6

4.5

3.7

3.5

2.3

2.6

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Source: Company, Angel Research

Source: Company, Angel Research

EBITDA margin improves marginally to 6.9%: TVSLs EBITDA margin for

2QFY2012 came in 46bp ahead of our estimates at 6.9% (up 29bp yoy and 24bp qoq). EBITDA margin expansion was aided by improvement in net average realization and a 120bp yoy savings in other expenditure. Employee cost as a percentage of sales also declined by 52bp yoy, thus aiding margin expansion. However, further margin expansion was arrested by higher raw-material costs raw material/sales ratio stood at 75.5% in 2QFY2012 vs. 73.7% in 2QFY2011 and 76.4% in 1QFY2012. Sequentially though, raw-material costs witnessed a correction as commodity prices have come down. Exhibit 7: EBITDA margin improves marginally to 6.9%
(%) 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 EBITDA margin 71.8 71.6 70.0 74.0 Raw material cost/sales 73.7 74.7 74.4 76.4 75.5

Exhibit 8: Net profit beats estimates, up 39.7% yoy


(` cr) 90 80 70 60 50 40 30 20 10 0 Net profit (LHS)
3.4 2.9 2.2 2.2 1.7

Net profit margin (RHS)


3.8 3.4 2.6 3.4

(%) 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0

5.5

6.4

6.5

6.4

6.7

6.1

5.6

6.7

6.9

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Source: Company, Angel Research

Source: Company, Angel Research

Net profit beats estimates on better-than-expected operating performance and lower interest cost: TVSL reported better-than-expected net profit growth of 39.7% yoy (30.1% qoq) to `77cr due to improved operating performance and lower interest expense. Lower-than-expected other income (down 7.2% yoy) and higher tax rate (24.1% as against 19.2% in 2QFY2011), however, arrested further growth in profitability during the quarter.

November 3, 2011

2QFY12

2QFY12

TVS Motor | 2QFY2012 Result Update

Key highlights
Management expects the two-wheeler industry to grow by 12-15% in FY2012. It is confident of achieving volume growth guidance of 15% for the current fiscal year. TVSL has a current capacity of 3mn two-wheelers and 50,000 three-wheelers. The company expects its EBITDA margin to improve in 2HFY2012 on softening commodity prices. TVSL hiked prices by ~1% in November 2011 in the domestic markets and by ~3.5% in October 2011 in the exports markets. During the quarter, the company invested `24.9cr in Sundaram Auto Components, `23.1cr in TVS Motor Services, `15cr in TVS Energy and `13.91cr in PT TVS Motor Company Indonesia.

Investment arguments
Healthy volume growth on success of new launches: TVSL posted healthy performance in FY2011, aided by overall volume recovery, improved product mix and benefits of operating leverage. New product launches such as Jive, Wego and Max4R helped TVSL to report strong performance. We expect the new launches to enable TVSL to ramp up its monthly run rate of two-wheelers and post annual volumes of 2.3mn and 2.6mn units in FY2012E and FY2013E, respectively, from 2mn units in FY2011. Improving product mix to sustain operating margins: Higher contribution of three-wheelers to total volumes coupled with the recent trend of softening commodity prices would help the company sustain its margin at around 6.5% in FY2012 and FY2013. However, we believe the overall scenario will remain challenging for the company in terms of intensifying competition. Consolidated earnings back in black: TVSLs consolidated performance was impacted by poor performance of its Indonesian subsidiary. The facility in Indonesia was started in FY2007 with an initial investment of ~`200cr. On a cumulative basis, TVSM invested around `270cr until FY2010. After the facility started, the economic slowdown extended the gestation period for TVSL in the Indonesian market. However, the expected recovery in the overseas market will help the company improve its consolidated performance. TVSL recorded a robust 42% yoy jump in its consolidated net sales to `6,544cr (`4,611cr) for FY2011 and its net profit stood at `128cr as against `34cr for FY2010.

November 3, 2011

TVS Motor | 2QFY2012 Result Update

Outlook and valuation


We continue to maintain our volume estimates at 2.3m/2.6mn for FY2012E/13E. However, we revise upwards our margin estimates to factor in the recent price increases (~1% and ~3.5% in domestic and exports markets) and softening commodity prices.

Exhibit 9: Change in estimates


Y/E March (` cr) Net sales OPM (%) EPS Earlier Estimates FY2012E 7,512 6.4 4.8 FY2013E 8,589 6.2 5.4 Revised Estimates FY2012E 7,604 6.7 5.6 FY2013E 8,683 6.4 6.2 % chg FY2012E 1.2 36bp 15.2 FY2013E 1.1 20bp 13.7

Source: Company, Angel Research

We estimate TVSL to post a CAGR of 17.5% in its top line and 19.2% in its net profit over FY201113E, aided by a ~13% CAGR in volume and improving operating performance due to the change in product mix and better operating leverage. Thus, we expect TVSL to register EPS of `5.6 in FY2012 and `6.2 in FY2013. At `66, TVSL is trading at 10.8x FY2013E earnings. We maintain our Accumulate view on the stock and value it at 12x (20% discount to the multiple of the top two industry players at 15x) FY2013E earnings to arrive at a target price of `74. However, continued investments in subsidiaries are a concern going ahead.

Exhibit 10: Key assumptions


Y/E March Total volume (units) Motorcycles Scooters Mopeds Three-wheelers Change yoy (%) Motorcycles Scooters Mopeds Three Wheelers Domestic (units) Exports (units)
Source: Company, Angel Research

FY08 1,273,602 597,757 264,508 411,209 128 (16.7) (35.4) 2.1 19.3 1,136,395 137,207

FY09 1,321,534 634,918 246,153 435,589 4,874 3.8 6.2 (6.9) 5.9 3,707.8 1,128,136 193,398

FY10 1,536,895 640,965 309,501 571,563 14,866 16.3 1.0 25.7 31.2 205.0 1,371,481 165,414

FY11 2,046,731 836,821 466,264 703,717 39,929 33.2 30.6 50.7 23.1 168.6 1,812,320 234,411

FY12E 2,332,082 920,503 573,505 788,163 49,911 13.9 10.0 23.0 12.0 25.0 2,063,893 268,189

FY13E 2,589,123 997,825 665,265 870,132 55,901 11.0 8.4 16.0 10.4 12.0 2,291,374 297,749

Exhibit 11: Angel vs. consensus forecast


Angel estimates FY12E Net sales (` cr) EPS (`) 7,459 5.6 FY13E 8,529 6.2 Consensus FY12E 7,437 5.5 FY13E 8,595 6.9 Variation (%) FY12E 0.3 1.8 FY13E (0.8) (10.4)

Source: Bloomberg, Angel Research

November 3, 2011

TVS Motor | 2QFY2012 Result Update

Exhibit 12: One-year forward P/E band


(`) 100 90 80 70 60 50 40 30 20 10 0 Share Price (`) 6x 9x 12x 15x

Exhibit 13: One-year forward EV/EBITDA band


(` cr) 6,000 5,000 4,000 3,000 2,000 1,000 0 EV (` cr) 4x 6x 8x 10x

Feb-09

Feb-09

Feb-11

Mar-05

Nov-03

Nov-05

Mar-07

Nov-07

Feb-11 May-11

Jul-04

Jul-06

Jul-08

Apr-03

Oct-09

Jun-10

Jul-04

Jul-06

Jul-08

Mar-05

Nov-03

Nov-05

Mar-07

Apr-03

Nov-07

Oct-09

Jun-10

Source: Company, Bloomberg, Angel Research

Oct-11

Source: Company, Bloomberg, Angel Research

Exhibit 14: One-year forward P/BV


(`) 100 90 80 70 60 50 40 30 20 10 0 Share Price (`) 1.0x 1.8x 2.5x 3.3x

Exhibit 15: Two-wheeler stock performance v/s Sensex


TVS 500 450 400 350 300 250 200 150 100 50 0 HH BAL Sensex

Feb-09

Feb-11

Jul-04

Jul-06

Jul-08

May-10

Dec-09

Sep-10

Jun-10

Jul-08

Mar-05

Mar-07

Mar-08

Nov-03

Nov-05

Nov-07

Aug-09

Oct-09

Oct-11

Apr-09

Apr-03

Jan-11

Source: Company, Bloomberg, Angel Research

Source: Company, Bloomberg, Angel Research

Exhibit 16: Automobile Recommendation summary


Company Ashok Leyland Bajaj Auto Hero MotoCorp Maruti Suzuki M&M Tata Motors TVS Motor Reco. Under review Neutral Neutral Accumulate Neutral Neutral Accumulate CMP Tgt. price (`) (`) 27 1,725 2,071 1,129 838 189 66 1,190 74 Upside (%) 5.4 11.4 P/E (x) FY12E 13.7 16.2 17.8 17.6 17.9 6.7 11.9 FY13E 10.5 14.9 15.9 13.3 15.7 6.1 10.8 EV/EBITDA (x) FY12E 7.4 11.2 10.7 10.9 11.8 4.7 6.0 FY13E 6.1 9.5 8.9 7.6 9.7 4.4 5.2 RoE (%) FY12E 12.8 55.5 63.7 12.3 25.0 44.6 24.5 FY13E 15.5 47.0 50.2 14.2 24.3 42.8 23.0 FY11-13E EPS CAGR (%) 4.6 10.4 18.8 4.4 11.1 3.7 19.2

Source: Company, Bloomberg, Angel Research

November 3, 2011

Nov-08

Oct-11

Oct-11

TVS Motor | 2QFY2012 Result Update

Profit & Loss Statement


Y/E March (` cr) Net Sales Other operating income Total operating income % chg Total Expenditure Net Raw Materials Other Mfg costs Personnel Other EBITDA % chg (% of Net Sales) Depreciation & Amortization EBIT % chg (% of Net Sales) Interest & other Charges Other Income (% of PBT) PBT % chg Extraordinary Expense/(Inc.) Tax (% of PBT) PAT (reported) ADJ. PAT % chg (% of Net Sales) Basic EPS (`) Adjusted EPS (`) % chg FY08 3,220 55 3,274 (16.1) 3,178 2,446 103 176 453 96 (47.8) 2.9 95 1 (98.7) 0.0 11 46 71.2 35 (61.1) (29) 4 5.6 32 3 (95.5) 0.1 0.7 0.1 (95.5) FY09 3,671 68 3,739 14.2 3,552 2,783 111 205 453 187 94.9 5.0 103 84 6,825 2.3 65 12 36.5 31 (12.1) (2) 0 0.1 31 29 872.9 0.8 0.7 0.6 872.9 FY10 4,363 67 4,430 18.5 4,243 3,137 133 248 724 187 0.4 4.2 103 85 1.3 1.9 75 67 150.4 76 144.9 32 (12) (26.7) 88 120 306.6 2.7 1.9 2.5 306.6 FY11 6,179 110 6,289 42.0 5,896 4,614 174 321 788 393 109.6 6.2 107 285 236.3 4.6 70 33 12.7 248 225.7 (11) 54 20.6 195 206 71.8 3.3 4.1 4.3 71.8 FY12E 7,459 145 7,604 20.9 7,093 5,579 205 388 921 510 30.0 6.7 115 396 38.7 5.3 53 10 2.8 353 42.1 88 25.0 264 264 28.4 3.5 5.6 5.6 28.4 FY13E 8,529 154 8,683 14.2 8,128 6,380 247 448 1,053 555 8.6 6.4 120 435 9.9 5.1 57 12 3.1 390 10.6 98 25.0 293 293 10.6 3.4 6.2 6.2 10.6

November 3, 2011

TVS Motor | 2QFY2012 Result Update

Balance Sheet
Y/E March (` cr) SOURCES OF FUNDS Equity Share Capital Reserves & Surplus Shareholders Funds Total Loans Deferred Tax Liability Total Liabilities APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off Total Assets 1,791 774 1,016 27 339 775 4 278 493 567 208 53 1,643 1,865 869 996 40 478 894 42 350 502 619 275 75 1,864 1,909 953 956 27 739 965 101 354 511 734 231 30 1,983 1,972 1,035 938 57 661 1,202 6 397 799 1,073 129 1,785 2,083 1,149 934 52 691 1,487 132 522 833 1,244 243 1,920 2,173 1,269 904 54 751 1,843 293 597 953 1,407 436 2,146 24 798 822 666 155 1,643 24 786 810 906 148 1,864 24 842 865 1,003 115 1,983 48 952 999 785 1,785 48 1,112 1,160 760 1,920 48 1,338 1,385 760 2,146 FY08 FY09 FY10 FY11 FY12E FY13E

November 3, 2011

TVS Motor | 2QFY2012 Result Update

Cash Flow Statement


Y/E March (` cr) Profit before tax Depreciation Change in Working Capital Less: Other income Direct taxes paid Cash Flow from Operations (Inc.)/Dec. in Fixed Assets (Inc.)/Dec. in Investments (Inc.)/Dec. in loans and advances Other income Cash Flow from Investing Issue of Equity Inc./(Dec.) in loans Dividend Paid (Incl. Tax) Others Cash Flow from Financing Inc./(Dec.) in Cash Opening Cash balances Net cash credit adjustment Closing Cash balances FY08 64 95 45 194 4 6 (129) 6 (42) 46 (119) 33 19 (45) 7 (105) 87 (22) 4 FY09 33 103 (44) (68) 0 160 (88) (139) (82) 12 (297) 240 19 (144) 115 (22) 4 (60) 42 FY10 44 103 (107) (287) (12) 339 (30) (262) 86 67 (140) 97 33 (188) (58) 142 42 83 101 FY11 259 107 (51) 60 54 202 (93) 78 (63) 33 (45) 24 (218) 60 (197) (331) (174) 101 (79) 6 FY12E 353 115 (137) (128) 88 370 (106) (30) (116) 10 (242) (25) 67 (44) (3) 125 6 132 FY13E 390 120 (43) (56) 98 425 (92) (60) (73) 12 (212) 67 (118) (51) 162 132 293

November 3, 2011

10

TVS Motor | 2QFY2012 Result Update

Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover Inventory / Sales (days) Receivables (days) Payables (days) WC (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage 0.4 3.4 0.5 2.1 1.3 0.2 0.9 1.1 0.1 0.3 4.1 (0.1) (0.1) 7.4 (0.2) (0.5) 7.6 2.0 45 11 61 17 2.0 36 13 53 21 2.3 26 17 51 15 3.2 24 15 49 7 3.7 26 14 51 6 4.1 26 14 51 5 0.1 0.1 0.4 4.8 4.6 3.6 4.4 4.5 14.3 15.2 16.0 22.1 21.4 22.1 24.5 21.4 23.5 23.0 0.0 0.9 2.1 0.1 1.7 0.3 (0.4) 2.3 1.0 2.2 4.9 8.2 0.4 3.5 1.9 1.3 2.4 5.9 10.0 0.3 4.6 4.6 0.8 3.4 12.6 6.2 0.2 13.6 5.3 0.7 4.3 17.0 5.2 0.0 17.3 5.1 0.8 4.8 18.2 5.6 (0.1) 16.5 0.7 0.1 2.7 0.4 17.3 0.7 0.6 2.8 0.4 17.1 1.9 2.5 4.7 0.6 18.2 4.1 4.3 6.6 1.1 21.0 5.6 5.6 8.0 1.2 24.4 6.2 6.2 8.7 1.2 29.2 1,039 24.9 3.8 0.5 1.1 36.3 2.1 106.8 23.5 3.9 0.5 1.0 18.9 1.9 26.3 14.2 3.6 0.9 0.8 17.7 1.7 15.3 10.1 3.2 1.7 0.5 8.3 1.8 11.9 8.3 2.7 1.8 0.4 6.0 1.6 10.8 7.6 2.3 1.8 0.3 5.2 1.3 FY08 FY09 FY10 FY11 FY12E FY13E

November 3, 2011

11

TVS Motor | 2QFY2012 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

TVS Motor No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

November 3, 2011

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