tvs motor-ru2qfy2011-221010-edited accepted...

Please refer to important disclosures at the end of this report 1

Y/E March (` cr) 2QFY11 2QFY10 % chg (yoy) Angel est. % diff.

Net sales 1,616 1,130 43.0 1,587 1.9

EBITDA 107.5 62.0 73.5 107.9 (0.39)

EBITDA margin (%) 6.7 5.5 117 6.8 (15)

Reported PAT 54.8 24.6 123.1 52.1 5.1

Source: Company, Angel Research

For 2QFY2011, TVS Motor (TVSM) posted 43% yoy top-line growth, in line with our estimates. The bottom line grew by 123.1% yoy, above our expectations, largely due to lower interest cost. Going forward, we broadly maintain our earnings estimates for TVSM. However, future valuation of the stock would be determined by consistent volume growth, improvement in market share and an uptick in margins. We believe that the recent run-up in the stock price factors in the higher volume and earnings growth expected over FY2010–12E. We remain Neutral on the stock.

Volume growth at 33%, earnings driven by margin expansion: TVSM reported turnover of `1,616cr (`1,130cr), a jump of 43% yoy, which primarily came on the back of the substantial 33.4% yoy increase in total volumes and about 6.8% yoy jump in average realisations. During the quarter, TVSM’s OPM witnessed a marginal 20bp qoq expansion to 6.7%, marginally below our estimates. Net profit grew by 123% yoy to `54.8cr (`24.6cr). Robust volume, EBITDA margin expansion and lower-than-expected interest cost and tax rate helped TVSM to report robust earnings growth in 2QFY2011.

Outlook and valuation: We estimate TVSM to post a 26.8% CAGR in top line and around 61.2% CAGR in net profit over FY2010–12E, aided by around 21.9% CAGR in volume and improving operating performance owing to change in product mix and better operating leverage. Thus, we expect TVSM to report EPS of `4.5 in FY2011E and `5.9 in FY2012E. However, considering TVSM’s inconsistent track record, we remain cautious on its relative performance vis-à-vis peers. At `75, the stock is trading at 16.9x FY2011E and 12.8x FY2012E earnings. We continue to maintain our Neutral view on the stock.

Key financials

Y/E March (` cr) FY2009 FY2010 FY2011E FY2012E

Net sales 3,671 4,363 6,197 7,011

% chg 14.0 18.9 42.0 13.1

Net profit 31.1 88.0 212.1 278.7

% chg (6.0) 183.2 140.9 31.4

EBITDA margin (%) 3.2 2.8 6.5 7.4

Adj. EPS (`) 0.6 2.3 4.5 5.9

P/E (x) 121.2 32.1 16.9 12.8

P/BV (x) 4.4 4.1 3.9 3.6

RoE (%) 3.8 12.9 23.9 29.4

RoCE (%) 0.9 0.9 13.6 17.1

EV/Sales (x) 1.1 0.9 0.6 0.5

EV/EBITDA (x) 33.4 31.1 9.7 7.3

Source: Company, Angel Research; Note: EPS is adjusted for 1:1 bonus issue

NEUTRAL CMP `75 Target Price -

Investment Period -

Stock Info

Sector

Bloomberg Code

Shareholding Pattern (%)

Promoters 59.3

MF / Banks / Indian Fls 8.6

FII / NRIs / OCBs 16.9

Indian Public / Others 15.2

Abs. (%) 3m 1yr 3yr

Sensex 12.7 19.1 15.4

TVS Motor 17.1 140.6 172.6

Face Value (Rs)

BSE Sensex

Nifty

Reuters Code

3,575

0.9

80/26

540,287

Automobile

Avg. Daily Volume

Market Cap (Rs cr)

Beta

52 Week High / Low

1

20,261

6,102

TVSM.BO

TVSL@IN

Vaishali Jajoo 022-4040 3800 Ext: 344

[email protected]

Yaresh Kothari 022-4040 3800 Ext: 313 [email protected]

TVS Motor Performance Highlights

2QFY2011 Result Update | Automobile

October 21, 2010

TVS Motor | 2QFY2011 Result Update

October 21, 2010 2

Exhibit 1: 2QFY2011 – Quarterly performance

Y/E March (` cr) 2QFY11 2QFY10 % chg 1HFY11 1HFY10 % chg

Net Sales 1,616 1,130 43.0 3,009 2,119 42.0

Consumption of RM 1,143 780 46.6 2,138 1,479 44.5

(% of Sales) 70.7 69.0

71.1 69.8

Staff Costs 84.7 58.5 44.7 157.6 110.9 42.2

(% of Sales) 5.2 5.2 6.1 5.2 5.2

Purchases of goods 28.7 20.9 37.4 47.4 36.9 28.2

(% of Sales) 1.8 1.9

1.6 1.7

Other Expenses 252.5 208.8 20.9 468.8 367.3 27.6

(% of Sales) 15.6 18.5

15.6 17.3

Total Expenditure 1,509 1,068 41.3 2,812 1,994 41.0

EBITDA 107.5 62.0 73.5 197.4 124.2 58.9

EBITDA margin (%) 6.7 5.5

6.6 5.9

Interest 14.2 15.3 (7.2) 31.2 32.5 (3.9)

Depreciation 28.0 25.3 10.5 54.6 50.7 7.6

Other Income 2.5 2.8 (12.0) 6.6 3.1 110.2

PBT (excl. Extr. Items) 67.8 24.1 180.7 118.2 44.2 167.7

Extr. Income/(Expense) - -

- -

PBT (incl. Extr. Items) 67.8 24.1 180.7 118.2 44.2 167.7

(% of Sales) 4.2 2.1

3.9 2.1

Provision for Taxation 13.0 (0.4)

23.1 1.5

(% of PBT) 19.2 (1.7)

19.5 3.4

Reported PAT 54.8 24.6 123.1 95.2 42.7 123.0

PATM (%) 3.4 2.2

3.2 2.0

Equity capital (cr) 47.5 23.8

47.5 23.8

EPS (`) 1.2 0.5 123.1 2.0 0.9 123.0

Source: Company, Angel Research; Note: EPS is adjusted for 1:1 bonus issue

Exhibit 2: Quarterly segmental performance

Y/E March (units) 2QFY11 2QFY10 % chg 1HFY11 1HFY10 % chg

TVSM 524,954 393,627 33.4 988,788 742,938 33.1

Motorcycles 209,006 154,843 35.0 409,364 307,621 33.1

Scooters 124,356 86,239 44.2 219,842 153,489 43.2

Mopeds 181,636 149,307 21.7 341,827 276,460 23.6

Three-wheelers 9,956 3,238 207.5 17,755 5,368 230.8

Exports (Inc. above ) 58,460 35,080 66.6 112,504 66,436 69.3



October 21, 2010 3

Top-line growth slightly above estimates, volume growth at 33.4%: For 2QFY2011, TVSM reported turnover of `1,616cr (`1,130cr), a jump of 43% yoy. Growth was primarily on the back of the substantial 33.4% yoy increase in total volumes and about 6.8% yoy jump in average realisations. During the quarter, TVSM’s motorcycle, scooter and moped sales grew by 35%, 44.2% and 21.7% yoy, respectively. Further, higher sales registered by the three-wheeler segment at 9,956 units (3,238 units) and the motorcycle segment at 209,006 units (154,843 units) supported healthy revenue growth. During 2QFY2011, TVSM exported 58,460 vehicles (35,080 vehicles), up 66.6% yoy.

Exhibit 3: Strong volume momentum across categories


Exhibit 4: Realisation improves on better product mix


In terms of volume market share, TVSM improved its position in the domestic three-wheeler passenger carrier segment by 280bp yoy to 5.9% (3.1%) in 1HFY2011. In the two-wheeler segment, the company’s market share increased by 50bp to 15.7% (15.2%) in 1HFY2011.

Exhibit 5: Net sales growth momentum continues

Source: Company, Angel Research; Note: Net sales excludes other

operating income

Exhibit 6: TVSM’s market share across categories

Source: Company, SIAM, Angel Research

EBITDA margin expands slightly by 20bp qoq, below estimates: For 2QFY2011, TVSM’s EBITDA margin expanded marginally by 20bp qoq and 117bp yoy to 6.7%, which was marginally below our estimates. The increase in EBITDA margin was on account of a 286bp decline in other expenditure, which balanced out the ~170bp increase in raw-material costs witnessed by the company. Raw-material cost accounted for 70.7% (69%) of TVSM’s net sales during the quarter.

5.3 6.3

21.9

29.8 32.8

33.4

0

5

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0

100,000

200,000

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1QFY10 2QFY10 3QFY10 4QFY10 1QFY11 2QFY11

(%)(units) Total volume yoy growth (RHS)

1.7

3.3 3.2

3.0

5.7

6.8

0

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2

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8

26,500

27,000

27,500

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(%)(` ) Net average realisation yoy growth (RHS)

7.1

9.9

25.8

33.7 40.4

42.5

0

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45

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200

400

600

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(%)(` cr) Net sales (LHS) Net sales growth (RHS)

20.5 23.5

20.8

17.7 19.6

23.6

7.3 6.8 6.2 6.6 7.3 7.1

2.3 2.6 2.5 4.5

5.6 4.5

14.8 15.2 14.2 13.8 14.8 15.7

0

5

10

15

20

25


(%) Scooters Motor Cycles

Three Wheelers Total Two Wheelers


October 21, 2010 4

Exhibit 7: Improved operating leverage sustains OPM


Exhibit 8: Net profit up 123.1% yoy


Bottom line at `54.8cr, above estimates: For 2QFY2011, TVSM recorded net profit growth of 123% yoy to `54.8cr (`24.6cr), which was better than our expectation of about `52cr. This was primarily due to lower-than-expected interest cost and tax. Net profit margin for the quarter improved primarily due to higher improved operating leverage and richer product mix, which helped the company to post robust earnings growth in 2QFY2011. Key highlights

Management maintains its volume guidance at 2mn units for FY2011.

The company’s growth will be secular across segments. Management has

indicated average growth of 20% for the industry. Going forward, the

company’s flagship brands such as Wego and Jive will constitute over 15% of

its total volumes, with Apache and Star City constituting the balance. TVSM is

targeting FY2011 sales of 1.4 lakh units of Jive alone (double from current

levels of about 7,000 units per month).

TVSM is targeting exports of over `800cr or 2.5lakh two-wheelers in FY2011.

Management has stated that it plans to increase capacity from 2.4mn to

2.8mn by March 2011 at a cost of `150cr.

TVSM’s three-wheeler sales continue to remain strong. The company has

entered the three-wheeler market in Nigeria and Peru. In July 2010, the

company launched MAX 4R, which will be catering to rural masses.

The company’s current market share in the two-wheeler segment stands at

15.7%. TVSM is set to gain 1–2% share, despite aggressive competition, if the

industry’s growth is robust at around 20%. In September 2010, TVSM took a price hike of up to 1.5% on various models

and plans to take another price hike during 3QFY2011. TVS Motor Company Indonesia registered total two-wheeler sales of about

11,000 units during 1HFY2011 as compared to 7,300 units recorded in

1HFY2010. Exports accounted for 2,300 units. During the quarter, the

company’s product portfolio continued to receive good response from

consumers in the region. Presently, TVSM has around 130 dealerships across

Indonesia and plans to expand its network to around 220 by March 2011.

6.3 5.5 6.4 6.6 6.5 6.7

73.3 71.8 71.6 70.0 74.0 73.7

0

10

20

30

40

50

60

70

80


(%) EBITDA margin Raw material cost/sales

1.9 2.2 2.2

1.7

2.9

3.4

0

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2

3

3

4

4

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(%)(` cr) Net profit (LHS) Net profit margin (RHS)


October 21, 2010 5

Exhibit 9: Scooters – Sales growth and market share


Exhibit 10: Motorcycles – Sales growth and market share


(30)

(20)

(10)

0

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20,000

40,000

60,000

80,000

100,000

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1QFY

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3QFY

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4QFY

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3QFY

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3QFY

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2QFY

11

(%)(units) Market share (RHS) Scooter-volume (LHS)

yoy growth (RHS)

(60)

(40)

(20)

0

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0

50,000

100,000

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1QFY

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2QFY

11

(%)(units) Market share (RHS) M-cycle-volume (LHS)

yoy growth (RHS)


October 21, 2010 6

Investment arguments

Higher earnings growth on success of new launches: TVSM displayed healthy

performance in FY2010, aided by overall volume recovery, improved product

mix and the benefits of operating leverage. In FY2011, new launches of Jive,

Wego and Max4R would help the company to register higher earnings growth.

We expect the new launches to enable TVSM to ramp up its monthly run rate

of two-wheelers and post annual volumes of 2mn and 2.2mn units in

FY2011E and FY2012E, respectively, from 1.3mn units in FY2010.

Overall, we expect domestic two-wheeler volumes to register a 21.6% CAGR

over FY2010–12E.

Improved product mix and three-wheeler support to increase margins: Higher

contribution from three-wheeler volumes to total volumes would help the

company expand its margins during FY2010–12E, implying a higher earnings

CAGR over the period. However, we believe the overall scenario will remain

challenging for the company in terms of intensifying competition.

Consolidated earnings back in black: TVSM’s consolidated performance was

impacted by poor performance of its Indonesian subsidiary. The facility in

Indonesia started in FY2007 with an initial investment of around `200cr. On a

cumulative basis, TVSM invested around `270cr until FY2010. After the facility

started, the economic meltdown extended the gestation period for TVSM in the

Indonesian market. However, the recent recovery in the overseas market

helped the company to improve its consolidated performance. TVSM recorded

a 21.3% yoy jump in consolidated net sales to `4,544cr (`3,747cr) for

FY2010 and net profit of `33.5cr as against a loss of `63.2cr for FY2009.

Outlook and valuation

Going ahead, TVSM will have to counter intensive competitive pressures, particularly from Bajaj Auto, Hero Honda and HMSI, which are launching new bikes and reducing prices in their bid to boost volumes. However, launch of the 125cc Flame, Jive, Wego, Max4R and three-wheelers would provide some respite to TVSM on the margin front going ahead, which is also reflected in the company’s FY2010 performance. Hence, we broadly maintain our estimates for the company.

We estimate TVSM to post a 26.8% CAGR in its top line and around 61.2% CAGR in net profit over FY2010–12E, aided by around 21.9% CAGR in volume and improving operating performance owing to the change in product mix and better operating leverage. Thus, we expect TVSM to register EPS of `4.5 in FY2011E and `5.9 in FY2012E. Nonetheless, considering the company’s inconsistent track record, we remain cautious on its relative performance vis-à-vis peers. At `75, the stock is trading at 16.9x FY2011E and 12.8x FY2012E earnings. We believe that the recent run-up in the stock price factors in the higher volume and earnings growth expected over FY2010–12E. Thus, future valuation of the stock would be determined by consistent growth in volumes, improvement in market share and uptick in margins. We continue to maintain our Neutral view on the stock.


October 21, 2010 7

Exhibit 11: Key assumptions

Y/E March FY07 FY08 FY09 FY10 FY11E FY12E

Total volume (units) 1,528,665 1,273,602 1,321,534 1,536,795 2,064,826 2,282,099

Motorcycles 925,140 597,757 634,918 640,960 865,296 951,826

Scooters 258,967 264,508 246,153 309,501 448,776 502,630

Mopeds 344,558 411,209 435,589 571,563 714,454 785,899

Three-wheelers - 128 4,874 14,771 36,300 41,745

Change yoy (%) 13.9 (16.7) 3.8 16.3 34.4 10.5

Motorcycles 14.7 (35.4) 6.2 1.0 35.0 10.0

Scooters 5.6 2.1 (6.9) 25.7 45.0 12.0

Mopeds 18.7 19.3 5.9 31.2 25.0 10.0

Three Wheelers - - - 203.1 145.8 15.0

Domestic (units) 1,425,652 1,136,590 1,158,165 1,369,144 1,832,533 2,025,363

Exports (units) 103,013 137,012 163,369 167,651 232,293 256,736

Source: Company, Angel research

Exhibit 12: Angel v/s consensus forecast

Angel estimates Consensus Variation (%)

FY11E FY12E FY11E FY12E FY11E FY12E

Top line (` cr) 6,197 7,011 5,729 6,746 8.2 3.9

EPS (`) 4.5 5.9 3.7 5.3 21.0 11.8

Source: Bloomberg, Angel Research

Exhibit 13: One-year forward P/E band

Source: Company, Bloomberg, Angel Research

Exhibit 14: One-year forward EV/EBITDA band


0

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(`) Share Price (`) 6x 12x 18x 24x

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,000

Apr

-03

Sep-

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Feb-

04

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4

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(` cr) EV (` cr) 4x 6x 8x 10x


October 21, 2010 8

Exhibit 15: One-year forward P/BV band


Exhibit 16: TVS, BAL, HH, Sensex – Stock Performance


Exhibit 17: Automobile – Recommendation summary

Company Reco. CMP

(`) Tgt. price

(`) Upside

(%) P/E EV/EBITDA RoE FY10-12E

FY11E FY12E FY11E FY12E FY11E FY12E EPS CAGR

Ashok Leyland Neutral 77 - - 17.8 14.1 11.7 9.9 15.0 17.5 37.5

Bajaj Auto Accumulate 1,489 1,603 7.6 16.7 14.9 10.9 9.5 79.8 70.2 30.5

Hero Honda Neutral 1,852 - - 16.3 14.7 12.0 10.4 58.2 52.6 9.8

Maruti Suzuki Accumulate 1,514 1,640 8.4 14.1 14.6 7.8 7.5 20.2 18.0 11.2

M&M Accumulate 713 778 9.1 18.6 16.3 12.2 10.2 24.8 23.3 11.5

Tata Motors Neutral 1,166 - - 9.4 8.6 6.1 4.9 64.9 46.1 173.2

TVS Motor Neutral 75 - - 16.9 12.8 9.7 7.3 23.9 29.4 58.1


0102030405060708090

100

Apr

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04

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4

Jan-

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Mar

-07

Sep-

07

Feb-

08

Jul-0

8

Jan-

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Jun-

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Nov

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-10

Oct

-10

(`) Share Price (`) 1x 1.75x 2.5x 3.25x

0

50

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-08

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TVS HH BAL Sensex


October 21, 2010 9

Profit and Loss Statement

Y/E March (` cr) FY07 FY08 FY09 FY10 FY11E FY12E

Net Sales 3,855 3,220 3,671 4,363 6,197 7,011

Total operating income 3,855 3,220 3,671 4,363 6,197 7,011

% chg 19.2 (16.5) 14.0 18.9 42.0 13.1

Total expenditure 3,720 3,178 3,552 4,243 5,794 6,496

Net raw materials 2,903 2,446 2,783 3,137 4,300 4,831

Other mfg costs 115.1 103.1 111.0 132.2 192.1 206.8

Personnel 171.4 176.2 204.5 251.3 309.8 336.5

Other 529.6 453.5 453.2 722.0 991.4 1,121.8

EBITDA 135.5 41.3 118.7 120.3 402.8 515.3

% chg (33.1) (69.5) 187.5 1.3 234.8 27.9

(% of Net sales) 3.5 1.3 3.2 2.8 6.5 7.4

Depreciation & Amortisation 87.6 94.6 102.9 102.5 122.9 142.6

EBIT 47.9 (53.3) 15.9 17.8 279.9 372.7

% chg (56.0) - - 12.1 1,475.2 33.2

(% of Net sales) 1.2 - 0.4 0.4 4.5 5.3

Interest & other charges 35.1 11.5 64.6 75.4 88.3 88.3

Other Income 78.0 101.4 79.9 133.8 87.4 92.1

(% of PBT) 80.2 155.2 270.7 134.3 31.3 24.5

PBT 90.8 36.7 31.1 76.2 279.0 376.6

% chg (46.1) (59.7) (15.1) 144.9 266.3 35.0

Extraordinary items (6.4) (28.7) (1.6) 23.4 - -

PBT (reported) 97.2 65.4 32.7 52.7 279.0 376.6

Tax 24.3 3.6 0.0 (11.8) 67.0 97.9

(% of PBT) 24.9 5.5 0.1 (22.5) 24.0 26.0

PAT (reported) 66.6 33.1 31.1 88.0 212.1 278.7

Adj. PAT 60.2 4.4 29.5 111.5 212.1 278.7

% chg (42.0) (92.8) 577.7 278.1 90.3 31.4

(% of Net sales) 1.6 0.1 0.8 2.6 3.4 4.0

Basic EPS (`) 1.4 0.7 0.7 1.9 4.5 5.9

Adjusted EPS (`) 1.3 0.1 0.6 2.3 4.5 5.9

% chg (71.0) (92.8) 577.7 278.1 90.3 31.4

Note: EPS is adjusted for 1:1 bonus issue


October 21, 2010 10

Balance Sheet

Y/E March (` cr) FY07 FY08 FY09 FY10 FY11E FY12E

SOURCES OF FUNDS

Equity Share Capital 24 24 24 24 48 48

Preference Capital - - - - - -

Reserves & Surplus 786 798 786 842 860 938

Shareholders’ Funds 809 822 810 865 907 985

Total Loans 634 666 906 1,003 1,103 1,103

Deferred Tax Liability 159 155 148 115 126 137

Total Liabilities 1,602 1,643 1,864 1,983 2,136 2,226

APPLICATION OF FUNDS

Gross Block 1,483 1,791 1,865 1,909 2,137 2,377

Less: Acc. Depreciation 686 774 869 953 1,076 1,219

Net Block 797 1,016 996 956 1,060 1,158

Capital Work-in-Progress 206 27 40 27 43 48

Goodwill - - - - - -

Investments 345 339 478 739 780 846

Current Assets 822 775 894 965 1,281 1,433

Cash 87 4 42 101 10 65

Loans & Advances 228 278 350 354 496 561

Other 508 493 502 510 775 807

Current liabilities 627 567 619 734 1,028 1,259

Net Current Assets 196 208 275 231 253 175

Mis. Exp. not written off 59 53 75 30 - -

Total Assets 1,602 1,643 1,864 1,983 2,136 2,226

Cash flow Statement Y/E March (` cr) FY07 FY08 FY09 FY10 FY11E FY12E

Profit before tax 97 65 33 53 279 377

Depreciation 88 95 103 103 123 143

Change in Working Capital 51 45 (44) (108) (25) (197)

Less: Other income 99 195 (68) (280) 180 (326)

Direct taxes paid 24 4 - (12) 67 98

Cash Flow from Operations 113 6 160 339 129 550

(Inc.)/Dec. in Fixed Assets (256) (129) (88) (30) (243) (245)

(Inc.)/Dec. in Investments (1) 6 (139) (262) (40) (66)

(Inc.)/Dec. in loans & advn. 3 (42) (82) (18) (115) (53)

Other income 78 101 80 134 87 92

Cash Flow from Investing (175) (63) (229) (176) (312) (271)

Issue of Equity - - - - 24 -

Inc./(Dec.) in loans 249 33 240 97 100 -

Dividend Paid (Incl. Tax) 35 43 36 19 33 111

Others (159) (102) (168) (220) (65) (335)

Cash Flow from Financing 124 (26) 108 (104) 92 (224)

Inc./(Dec.) in Cash 62 (83) 38 59 (91) 55

Opening Cash balances 24 87 4 42 101 10

Closing Cash balances 87 4 42 101 10 65


October 21, 2010 11

Key Ratios Y/E March FY07 FY08 FY09 FY10 FY11E FY12E

Valuation Ratio (x)

P/E (on FDEPS) 59.4 829.3 121.2 32.1 16.9 12.8

P/CEPS 23.2 28.0 26.7 16.7 10.7 8.5

P/BV 4.4 4.4 4.4 4.1 3.9 3.6

Dividend yield (%) 1.1 0.9 0.5 0.8 2.7 4.0

EV/Sales 1.0 1.2 1.1 0.9 0.6 0.5

EV/EBITDA 27.9 94.4 33.4 31.1 9.7 7.3

EV / Total Assets 2.4 2.4 2.1 1.9 1.8 1.7

Per Share Data (`)

EPS (Basic) 1.4 0.7 0.7 1.9 4.5 5.9

EPS (Adjusted) 1.3 0.1 0.6 2.3 4.5 5.9

Cash EPS 3.2 2.7 2.8 4.5 7.1 8.9

DPS 0.9 0.7 0.4 0.6 2.0 3.0

Book Value 17.0 17.3 17.1 18.2 19.1 20.7

DuPont Analysis

EBIT margin 1.2 (1.7) 0.4 0.4 4.5 5.3

Tax retention ratio 0.8 0.9 1.0 1.2 0.8 0.7

Asset turnover (x) 2.8 2.0 2.1 2.4 3.1 3.3

ROIC (Post-tax) 2.6 (3.2) 0.9 1.2 10.6 12.9

Cost of Debt (Post Tax) 5.2 1.7 8.2 9.7 6.4 5.9

Leverage (x) 0.1 0.3 0.4 0.3 0.3 0.3

Operating ROE 2.2 (4.8) (2.3) (1.6) 11.8 14.7

Returns (%)

ROCE (Pre-tax) 3.3 (3.3) 0.9 0.9 13.6 17.1

Angel ROIC (Pre-tax) 3.2 (3.3) 0.9 0.9 13.2 17.3

ROE 7.6 0.5 3.6 13.3 23.9 29.4

Turnover ratios (x)

Asset Turnover (Gross Block) 2.7 2.0 2.0 2.3 3.1 3.1

Inventory / Sales (days) 36 45 36 26 23 26

Receivables (days) 8 11 13 17 17 16

Payables (days) 52 61 53 51 45 50

Working capital cycle (ex-cash) (days) 7 18 22 15 11 9

Solvency ratios (x)

Net debt to equity 0.2 0.4 0.5 0.2 0.3 0.2

Net debt to EBITDA 1.5 7.8 3.3 1.4 0.8 0.4

Interest Coverage (EBIT / Interest) 1.4 - 0.2 0.2 3.2 4.2


October 21, 2010 12

Disclosure of Interest Statement TVS Motor 1. Analyst ownership of the stock No 2. Angel and its Group companies ownership of the stock No 3. Angel and its Group companies' Directors ownership of the stock No 4. Broking relationship with company covered No Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors. Ratings (Returns) : Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%) Reduce (-5% to 15%) Sell (< -15%)

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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.

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