TVS Motor Company share price slid over 3 per cent on Tuesday after the company reported lower-than-expected financial results for the quarter ended June 30, 2016. The auto major reported 21.15 per cent rise in net profit at Rs 121.25 crore for April-June 2016 period against Rs 100.08 crore in the corresponding quarter a year ago. Net sales of the company jumped 12.15 per cent year-on-year to Rs 2852.59 crore in the quarter under review.
According to Religare Capital Markets, TVS net profit stood below our estimate of Rs 130 crore. Gross margin was down 230 basis points qoq which was offset by 340 basis points decline in other expenses to sales.
The share price of TVS Motor closed 3.08 per cent down at Rs 291.40. The scrip opened at Rs 305 and has touched a high and low of Rs 314.75 and Rs 289.40, respectively, in trade so far. Sensex settled 118.82 points down at 27,976.52.
Operating profit of TVS Motors Company jumped 22.08 per cent yoy to Rs 236.55 crore against Rs 193.76 crore in the same quarter last year. Other income increased by 72.16 per cent yoy to Rs 36.17 crore.
Religare in a research note said, “The stock is trading at steep valuations of 23 times FY17E and 18 times FY18E PE building in recovery in volumes/export growth and margin revival. Therefore, we maintain our ‘Hold’ rating on the stock.”