TVS Motor Co. Ltd shares dropped as much as 5% in early trade on Tuesday, i.e. 23 July, after the auto maker reported a 5.5% decline in its consolidated net profit at Rs 151.24 crore for the first quarter (Q1) ended June. The stock, however, pared losses later to trade over 1% lower.
At 10:44am, the TVS Motor stock was trading at Rs 376.20, down 1%, on BSE after hitting an intra-day low of Rs 360.80, its lowest level in two years. The stock has fallen nearly 30% in the last one year.
TVS Motor’s consolidated total income during the June quarter stood at Rs 5,026.27 crore as against Rs 4,626.15 crore in the year-ago period. The company’s total expenses during the period were higher at Rs 4,793.40 crore compared with Rs 4,385.50 crore a year ago.
The company’s overall two-wheeler sales, including exports, stood at 884,000 units during the quarter ended June; lower than 893,000 units in the year-ago period.
Motorcycle sales in the June quarter grew 7.8% year-on-year to 417,000 units, while scooter sales rose 2.4% to 295,000 units. Total three-wheeler sales grew 11.1% to 40,000 units in the June quarter.
The management said it expected two-wheeler industry volumes to decline in the ongoing September quarter and the second half of FY20 due to below-normal monsoon, slower-than-expected economic recovery, high channel inventory, and BS VI transition challenges. TVS Motor, though, guided to outperform the industry in both domestic and international markets led by a strong portfolio and new launches.
Credit Suisse upgraded the TVS Motor stock to ‘neutral’ from ‘underperform’ but cut its price target to Rs 360 per share from Rs 390 earlier. On both scooters and motorcycles, the company continues to outperform the industry, the brokerage said.
Citi gave a ‘sell’ call on the stock and cut its target to Rs 360 per share from Rs 430 earlier. The management commentary on industry growth is negative and the outlook remains weak, it noted.
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