TVS Motor Company shares plunge 10% despite 30% rise in Q4 net profit

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New Delhi | Published: May 3, 2016 4:16:33 PM

TVS Motor Company shares plunged nearly 10 per cent on Tuesday despite the company posted 30.09 per cent rise in its net profit figures at Rs 117.76 crore for the quarter ended March 2016.

tvs motor shares sensexTVS Motor Company shares plunged nearly 10 per cent on Tuesday despite the company posted 30.09 per cent rise in its net profit figures at Rs 117.76 crore for the quarter ended March 2016.

TVS Motor Company shares plunged nearly 10 per cent on Tuesday despite the company posted 30.09 per cent rise in its net profit figures at Rs 117.76 crore for the quarter ended March 2016. It has posted a net profit of Rs 90.52 crore in the same quarter last year.

The share price of TVS Motor closed 9.66 per cent down at Rs 287.90. The scrip opened at Rs 321.90 and touched a high and low of Rs 325.35 and Rs 279.30, respectively, in trade so far.

Shares of the company fell after Q4FY16 margin failed to meet market expectations. Mihir Jhaveri, director, institutional research, Religare Capital Markets, said, “TVS Motor reported Q4FY16 margin at 6.3 per cent below our estimates of 7.3 per cent and consensus 7.1 per cent. However, net profit beat our estimates due to higher other income and lower tax.”

Gross sales of the company grew 15.26 per cent year-on-year to Rs 2,776.39 crore.

Motorcycle sales increased from 2.21 lakh units registered in the fourth quarter of 2014-15 to 2.47 lakh units in the fourth quarter of 2015-16. Scooter sales jumped from 1.66 lakh in Jan-March 2015 to 1.98 lakh units in Jan-March 2016. The company exported 0.83 lakh units of two wheelers in the quarter under review.

Jhaveri said, “The stock is trading at steep valuations of 22xFY17E and 17xFY18E PE building in recovery in volumes and export growth and margin revival. Therefore, we maintain our ‘Hold’ rating on the stock.”

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