4QFY2013 Result Update | Automobile

May 2, 2013

TVS Motor Company

Performance Highlights
Quarterly highlights (Standalone)
Y/E March (` cr) Net Sales EBITDA Adj. EBITDA margin (%) Adj. PAT 4QFY13 1,748 94 5.4 58 4QFY12 1,637 99 6.0 57 % chg (yoy) 6.8 (5.2) (68)bp 1.6 3QFY13 1,799 107 5.9 52 % chg (qoq) (2.8) (12.1) (57)bp 10.8

NEUTRAL
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Net Debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Automobile 1,891 528 1.0 50/32 287,102 1.0 19,736 5,999 TVSM.BO TVSL@IN

`40 -

Source: Company, Angel Research

For 4QFY2013, TVS Motor Company (TVSL) reported a weak operating performance, leading to a 68bp yoy (57bp qoq) decline in EBITDA margins. The adjusted bottom-line at `58cr (adjusted for exceptional charge) however, was ahead of our estimates led by 58.2% yoy (52.9% qoq) decline in interest cost and lower tax rate (8% as against 21.7% in 3QFY2013). TVSL recorded an exceptional charge of `92cr in 4QFY2013 towards provisioning for diminution in the value of its European subsidiary as a result of which, the company posted a bottom-line loss of `33cr. TVSL has been impacted the most by the ongoing slowdown in the two-wheeler industry and has witnessed a significant erosion in its market share in the domestic scooter (down ~500bp to 14.5%) and motorcycle (down ~70bp to 5.5%) segments in FY2013. We expect the operating environment to remain challenging for TVSL in FY2014 given that the competition in the sector is increasing and also that the demand environment remains sluggish. We recommend a Neutral rating on the stock. Poor 4QFY2013 performance: TVSLs top-line declined by 2.8% qoq in 4QFY2013 to `1,748cr, which was due to a 1.8% qoq decline in volumes on account of the slowdown in the two-wheeler industry and increasing competition. The net average realization too registered a decline of 1.3% qoq on account of an adverse product-mix. On a yoy basis though, the top-line grew by 6.8% yoy, driven by a strong 10.9% yoy growth in net average realization on back of a superior product-mix, comprising a greater proportion of three-wheelers (2.8% vs 1.5% in 4QFY2012). The EBITDA margin posted a decline of 68bp yoy (57bp qoq) to 5.4%, against our expectation of 6%, led by a sharp increase in other expenditure on account of higher marketing spends and increase in power and distribution expenses. Hence the operating profit declined by 5.2% yoy (12.1% qoq) to `94cr. Outlook and valuation: At `40, TVSL is trading at 6.9x FY2015E earnings. We recommend a Neutral rating on the stock.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 57.4 23.0 2.2 17.4

Abs. (%) Sensex TVS Motor

3m (0.2) (6.6)

1yr 14.1

3yr 12.4

(4.1) (17.5)

Key financials (Standalone)

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

FY2012 7,142 13.6 249 25.3 6.6 5.2 7.6 1.6 22.9 18.5 0.2 3.5

FY2013E 7,065 (1.1) 207 (16.8) 5.8 4.4 16.3 1.5 17.3 14.1 0.2 3.8

FY2014E 7,715 9.2 236 14.2 6.0 5.0 8.0 1.4 18.1 16.6 0.2 3.0

FY2015E 8,584 11.3 275 16.5 6.1 5.8 6.9 1.2 18.5 17.9 0.1 2.2

Yaresh Kothari
022-3935 7800 Ext: 6844 yareshb.kothari@angelbroking.com

Please refer to important disclosures at the end of this report

TVS Motor Company | 4QFY2013 Result Update

Exhibit 1: Quarterly financial performance (Standalone)

Y/E March (` cr) Net Sales Consumption of RM (% of Sales) Staff Costs (% of Sales) Purchase of 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 Adj PAT Adj. PATM Equity capital (cr) Reported EPS (`) Adjusted EPS (`)
Source: Company, Angel Research

4QFY13 1,748 1,200 68.6 93 5.3 42 2.4 320 18.3 1,655 94 5.4 6 35 10 63 (91) (28) (1.6) 5 8.0 (33) 58 3.3 47.5 (0.7) 1.2

4QFY12 1,637 1,152 70.4 95 5.8 37 2.2 254 15.5 1,538 99 6.0 13 32 8 62 62 3.8 5 8.0 57 57 3.5 47.5 1.2 1.2

% chg (yoy) 6.8 4.1 (2.3) 14.1 25.8 7.6 (5.2) (58.2) 9.3 16.2 1.5 1.4 1.6

3QFY13 1,799 1,256 69.8 104 5.8 40 2.2 293 16.3 1,693 107 5.9 12 33 5 67 67 3.7 15 21.7 52 52 2.9 47.5

% chg (qoq) (2.8) (4.4) (11.0) 5.3 9.3 (2.2) (12.1) (52.9) 5.9 98 (5.8) (65.5) 10.8

FY2013 7,065 4,945 70.0 407 5.8 151 2.1 1,152 16.3 6,656 409 5.8 48 130 24 254 (91) 164 2.3 48 18.9 116 207 2.9 47.5

FY2012 7,142 5,117 71.7 370 5.2 144 2.0 1,041 14.6 6,672 469 6.6 57 118 22 316 316 4.4 67 21.3 249 249 3.5 47.5 5.2 5.2

% chg (yoy) (1.1) (3.4) 10.0 5.3 10.7 (0.2) (12.9) (15.9) 11.0 9.8 (19.6) (48.3) (29.4) (53.4) (16.9)

1.5

1.1 1.1

10.8

2.4 4.4

(53.4) (16.9)

Exhibit 2: 4QFY2013 Actual vs Angel estimates

Y/E March (` cr) Net Sales EBITDA EBITDA margin (%) Adj. PAT
Source: Company, Angel Research

Actual 1,748 94 5.4 58

Estimates 1,800 108 6.0 53

Variation (%) (2.9) (13.5) (66)bp 10.1

May 2, 2013

TVS Motor Company | 4QFY2013 Result Update

Exhibit 3: 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 3,103 11,193 14,296 4,206 3,514 7,720 (26.2) 218.5 85.2 4,707 8,895 13,602 (34.1) 25.8 5.1 15,616 33,574 49,190 14,201 24,444 38,645 10.0 37.4 27.3 208,502 1,247 209,749 206,863 1,341 208,204 0.8 (7.0) 0.7 193,677 985 194,662 7.7 26.6 7.8 788,761 3,308 792,069 776,866 9,076 785,942 1.5 (63.6) 0.8 93,936 3,881 97,817 111,445 6,336 117,781 (15.7) (38.7) (17.0) 107,666 4,141 111,807 (12.8) (6.3) (12.5) 424,188 17,369 441,557 497,117 32,199 529,316 (14.7) (46.1) (16.6) 137,707 49,641 187,348 148,536 45,861 194,397 (7.3) 8.2 (3.6) 153,413 44,873 198,286 (10.2) 10.6 (5.5) 558,468 191,338 749,806 621,722 221,392 843,114 (10.2) (13.6) (11.1) 4QFY13 509,210 443,248 65,962 4QFY12 528,102 471,050 57,052 % chg (yoy) (3.6) (5.9) 15.6 3QFY13 518,357 459,463 58,894 % chg (qoq) (1.8) (3.5) 12.0 FY2013 2,032,622 1,787,033 245,589 FY2012 2,197,017 1,909,906 287,111 % chg (yoy) (7.5) (6.4) (14.5)

Source: Company, Angel Research

Top-line slightly lower than expected: For 4QFY2013, TVSLs top-line registered a 6.8% yoy growth to `1,748cr, which was slightly lower than our expectation of `1,800cr. The top-line was driven by a strong 10.9% yoy growth in net average realization on back of a superior product-mix, comprising a greater proportion of three-wheelers (2.8% vs 1.5% in 4QFY2012). The volumes however registered a decline of 3.6% yoy, led by the slowdown in the two-wheeler industry and also on account of increasing competition from Honda Motorcycle and Scooters India Ltd (HMSI). As a result, scooter volumes registered a sharp decline of 17% yoy while motorcycle sales declined by a relatively lower 3.6% yoy. Three-wheeler sales on the other hand continued to witness momentum, posting an 85.2% yoy (5.1% qoq) growth. On a sequential basis though, the top-line posted a decline of 2.8% following a 1.8% and 1.3% decline in total volumes and net average realization respectively.

May 2, 2013

TVS Motor Company | 4QFY2013 Result Update

Exhibit 4: Total volumes down 3.6% yoy

(units) 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0
(19.6) 519,514 535,008 24.0 15.3 1.1 1.7 (3.0) (2.1) 15.1 (3.6)

Exhibit 5: Strong growth in net average realization

(%) 30.0 25.0 20.0 15.0 10.0 5.0 0.0 (5.0) (10.0) (15.0) (20.0) (25.0) (`) 35,000 34,000 33,000 32,000 31,000 30,000 29,000 28,000
(1.4) 30,968 8.9 8.1 31,911 6.7 32,300 32,960 7.1

Total volume
604,226

yoy growth (RHS)

Net average realization

34,502 8.1

yoy growth (RHS)

34,196 34,344 10.9 33,882

(%) 12.0 10.0 8.0 6.0

529,681 528,102 519,132

485,923

518,357 509,210

5.9

30,541 4.2

4.0 2.0 0.0 (2.0)

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13
16.0

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 6: Muted growth in top-line

( ` cr) 2,500 2,000 1,500 1,000 500 0 34.5 1,635 Net sales (LHS) 25.3 1,746 23.2 1,991 Net sales growth (RHS) (%) 40.0 1,775 7.8 0.1 1,637 1,820 1,799 1,748 1,691 6.8 1.3 (15.1) 30.0 20.0 4.2 10.0 0.0 (10.0) (20.0)

Exhibit 7: Domestic market share trend

(%) 25.0 20.0 15.0 10.0 5.0 0.0 3.5 2.3 2.6 2.8 3.2 2.9 3.3 3.1 2.3 14.7 6.8 14.3 6.3 15.2 6.9 13.5 5.6 13.6 5.9 12.8 5.4 13.1 5.3 21.3 Scooters Three Wheelers 22.9 20.5 Motor Cycles Total Two Wheelers 19.4 15.4 15.3 14.2 12.6 12.9 5.6

12.6 5.8

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13 4QFY13

Source: Company, Angel Research

Source: Company, SIAM, Angel Research

EBITDA margin contracts further to 5.4%: On the operating front, the EBITDA margin remained under pressure and contracted further to 5.4%, a decline of 68bp yoy (57bp qoq) due to a sharp increase in other expenditure on a yoy as well as sequential basis. Other expenditure on an absolute basis surged 25.8% yoy (9.3% qoq) largely due to higher marketing spends and increase in power and distribution expenses. On the positive side the company benefitted from lower raw-material and employee expenses. While raw-material cost as a percentage of sales declined 159bp yoy (97bp qoq), employee expenditure as a percentage of sales declined 50bp on a yoy as well as qoq basis. The Management expects to benefit from the softening commodity prices; however, other expenditure is likely to remain at higher levels given the weak domestic demand scenario and increasing competition which would necessitate higher promotional expenditure.

May 2, 2013

TVS Motor Company | 4QFY2013 Result Update

Exhibit 8: EBITDA margin pressures continues

(%) 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 5.9 6.7 7.0 7.2 6.0 5.9 6.0 5.9 5.4 EBITDA margin 74.6 76.9 75.9 73.2 72.6 Raw material cost/sales 74.6 73.6 72.0 71.0

Exhibit 9: Adjusted net profit aided by lower interest cost

( ` cr) 90 80 70 60 50 40 30 20 10 0
44 59 77 57 57 51 45 52 58

Net profit (LHS) 3.9 3.4 2.7 3.2 3.5

Net profit margin (RHS)

(%) 4.5 3.3 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0

2.8

2.7

2.9

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

Source: Company, Angel Research

Source: Company, Angel Research

Adjusted net profit aided by lower interest cost: For 4QFY2013, the adjusted bottom-line at `58cr (adjusted for exceptional charge), was ahead of our estimates led by 58.2% yoy (52.9% qoq) decline in interest cost and lower tax rate (8% as against 21.7% in 3QFY2013). TVSL recorded an exceptional charge of `92cr in 4QFY2013 towards provisioning for diminution in the value of its European subsidiary as a result of which, the company posted a bottom-line loss of `33cr.

May 2, 2013

4QFY13

TVS Motor Company | 4QFY2013 Result Update

Investment arguments
Success of new launches key to volume growth: TVSL registered a 7.5% yoy decline in its total volumes in FY2013 due to the slowdown in two-wheeler demand and rising competitive intensity in the sector. Nonetheless, TVSL plans to launch two scooters, one motorcycle and a diesel three-wheeler in FY2014, and we believe the success of these new launches is key for the company to register volume growth going ahead. We expect the new launches coupled with the recent launch of Phoenix to enable TVSL to register a volume growth of ~6% over FY2013-15E. Limited room for margin expansion: The Management expects operating margins to remain under pressure going ahead as rising competition coupled with new launches would necessitate higher advertisement and promotional expenditure which would negate the benefits of softening commodity prices. We believe that will keep margins under pressure. We expect the companys margin to remain around 6% in FY2014/15. Tie-up with BMW positive in the long run: TVSL has entered into a long term co-operation agreement with BMW's motorcycle division, BMW Motorrad to develop and produce new series of motorcycles that will cater to the sub 500cc segment. As a part of the deal, TVSL will invest EUR20mn in the collaboration, which is expected to introduce a new product in 2015. We see this as a positive development for TVSL and a step in the right direction as the BMW association will provide technological access to the company. The tie-up is also expected to help TVSL expand its presence in the premium motorcycle space, where it currently offers the Apache (160cc and 180cc) series. In the near term though, we believe that this agreement is unlikely to alter the current positioning of the company in the domestic motorcycle industry.

Outlook and valuation

TVSL has been impacted the most by the ongoing slowdown in the two-wheeler industry and has witnessed a significant erosion in its market share in the domestic scooter (down ~500bp to 14.5%) and motorcycle (down ~70bp to 5.5%) segments in FY2013. Going ahead in FY2014, TVSL is expected to launch two scooters, one motorcycle and a diesel three-wheeler, which is expected to enable the company to recover some lost ground in FY2014. We largely maintain our FY2014/15 volume, revenue and earnings estimates for TVSL. We expect the company to register a volume CAGR of ~6% over FY2013-15E aided by ~11% and ~6% volume CAGR in the three-wheeler and two-wheeler segments respectively.

May 2, 2013

TVS Motor Company | 4QFY2013 Result Update

Exhibit 10: Change in estimates

Y/E March Net Sales (` cr) OPM (%) EPS (`)
Source: Company, Angel Research

Earlier Estimates 7,714 6.1 4.8 8,532 6.3 5.8

Revised Estimates 7,715 6.0 5.0 8,584 6.1 5.8

% chg 0.0 (5)bp 2.7 0.6 (19)bp 0.3

FY2014E FY2015E FY2014E FY2015E FY2014E FY2015E

At the current market price of `40, TVSL is trading at 6.9x FY2015E earnings. We recommend a Neutral rating on the stock.

Exhibit 11: 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

FY2010 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

FY2011 2,032,404 836,821 452,006 703,717 39,860 32.2 30.6 46.0 23.1 168.1 1,797,993 234,411

FY2012 2,196,138 841,362 529,095 785,942 39,739 8.1 0.5 17.1 11.7 (0.3) 1,909,672 286,466

FY2013E 2,032,515 749,973 441,634 792,069 48,839 (7.5) (10.9) (16.5) 0.8 22.9 1,786,887 245,628

FY2014E 2,138,582 776,222 476,965 831,672 53,723 5.2 3.5 8.0 5.0 10.0 1,871,259 267,323

FY2015E 2,298,738 822,795 534,200 881,573 60,170 7.5 6.0 12.0 6.0 12.0 1,988,409 310,330

Exhibit 12: Angel vs consensus forecast

Angel estimates FY14E FY15E Total op. income (` cr) EPS (`) 7,715 5.0 8,584 5.8 Consensus FY14E FY15E 7,837 5.0 8,681 6.0 Variation (%) FY14E FY15E (1.6) 0.4 (1.1) (3.2)

Source: Bloomberg, Angel Research

Exhibit 13: One-year forward P/E band

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

Exhibit 14: One-year forward P/E chart

(x) 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 One-yr forward P/E Three-yr average P/E

Dec-05

Jan-05

Aug-09

Apr-03

Jun-11

Nov-06

Feb-04

Oct-07

Sep-08

May-12

Apr-13

Jul-10

Dec-11

Aug-10

Mar-12

Dec-12

Jun-12

Oct-09

Nov-10

Feb-10

Feb-11

Sep-11

May-10

Source: Company, Angel Research

Source: Company, Angel Research

May 2, 2013

May-11

Sep-12

Apr-13

Jul-09

TVS Motor Company | 4QFY2013 Result Update

Exhibit 15: One-year forward EV/EBITDA band

(` cr) 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 EV (` cr) 4x 6x 8x 10x

Exhibit 16: Two-wheeler stocks performance vs Sensex

700 600 500 400 300 200 100 0 TVSL HMCL BJAUT Sensex

Dec-10

Aug-08

Mar-08

Aug-09

Jan-10

Jun-11

Nov-11

Feb-09

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 17: Automobile - Recommendation summary

Company Ashok Leyland Bajaj Auto Hero MotoCorp Maruti Suzuki Tata Motors TVS Motor Reco. Buy Accumulate Accumulate Accumulate Accumulate Neutral CMP Tgt. price (`) (`) 23 1,860 1,613 1,680 955 296 40 27 2,014 1,819 1,847 1,006 327 Upside (%) 15.8 8.3 12.8 9.9 5.4 10.2 P/E (x) FY14E FY15E 11.7 15.8 14.6 15.6 16.0 9.1 8.0 8.6 13.9 11.5 13.6 14.0 7.5 6.9 EV/EBITDA (x) FY14E 5.3 10.6 7.5 7.8 8.8 4.2 3.0 FY15E 4.5 8.9 6.7 6.7 7.3 3.5 2.2 RoE (%) FY14E 12.1 40.2 39.8 16.2 22.3 23.4 18.1 FY15E 15.2 36.6 40.7 16.0 21.6 23.3 18.5 FY13-15E EPS CAGR (%) 43.9 13.8 14.9 24.7 11.5 17.6 15.3

Mahindra & Mahindra Accumulate

Source: Company, Angel Research

Company background
TVS Motor (TVSL), a flagship company of the TVS Group, is the third largest 2W manufacturer in India. The company is present across the motorcycles, scooters and mopeds segments, having a market share of ~8%, ~22% and 100%, respectively. The company successfully ventured into the 3W segment in FY2009 and has garnered a market share of 6.6% as of March 31, 2013. The company has three manufacturing facilities in India, located at Hosur (Tamil Nadu), Mysore (Karnataka) and Solan (Himachal Pradesh) with 2W and 3W capacity of 2.75mn and 75,000 units, respectively. TVSL is also the second largest exporter of two-wheelers in the country.

May 2, 2013

May-12

Apr-03

Apr-04

Apr-05

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10

Apr-11

Apr-12

Apr-13

Oct-12

Apr-13

Jul-10

TVS Motor Company | 4QFY2013 Result Update

Profit and loss statement (Standalone)

Y/E March (` cr) Total operating income % chg Total expenditure Net raw material costs Other mfg costs Employee expenses Other EBITDA % chg (% of total op. income) Depreciation & amortization EBIT % chg (% of total op. income) Interest and other charges Other income Recurring PBT % chg Extraordinary income/(exp.) PBT Tax (% of PBT) PAT (reported) ADJ. PAT % chg (% of total op. income) Basic EPS (`) Adj. EPS (`) % chg FY2010 FY2011 FY2012 FY2013E FY2014E FY2015E 4,430 18.5 4,243 3,137 133 248 724 187 0.4 4.2 103 85 1.3 1.9 75 67 76 144.9 (32) 108 (12) (11.0) 88 120 306.6 2.7 1.9 2.5 306.6 6,288 41.9 5,896 4,614 171 327 784 392 109.2 6.2 107 285 235.5 4.5 72 36 248 225.7 (4) 252 54 21.2 195 199 65.7 3.2 4.1 4.2 65.6 7,142 13.6 6,672 5,261 202 370 839 469 19.7 6.6 118 352 23.5 4.9 57 22 316 27.5 0 316 67 21.3 249 249 25.3 3.5 5.2 5.2 25.3 7,065 (1.1) 6,656 5,097 234 407 918 409 (12.8) 5.8 130 279 (20.8) 3.9 48 24 254 (19.6) 91 164 48 29.1 116 207 (16.8) 2.9 2.4 4.4 (16.8) 7,715 9.2 7,252 5,535 270 455 991 463 13.2 6.0 139 324 16.2 4.2 40 25 309 21.3 309 73 23.5 236 236 14.2 3.1 5.0 5.0 14.2 8,584 11.3 8,064 6,180 296 511 1,076 520 12.4 6.1 147 373 15.1 4.3 40 27 360 16.5 360 85 23.5 275 275 16.5 3.2 5.8 5.8 16.5

May 2, 2013

TVS Motor Company | 4QFY2013 Result Update

Balance sheet statement (Standalone)

Y/E March (` cr) SOURCES OF FUNDS Equity share capital Reserves & surplus Shareholders Funds Total loans Deferred tax liability Other long term liabilities Long term provisions Total Liabilities APPLICATION OF FUNDS Gross block Less: Acc. depreciation Net Block Capital work-in-progress Goodwill Investments Long term loans and advances Other noncurrent assets Current assets Cash Loans & advances Other Current liabilities Net current assets Misc. exp. not written off Total Assets 1,909 953 956 27 739 965 101 354 511 734 231 30 1,983 1,972 1,035 938 57 661 96 1,106 6 301 799 1,086 19 1,771 2,154 1,129 1,026 53 931 53 1,078 13 247 819 1,110 (31) 2,031 2,251 1,259 991 56 869 73 1,129 17 302 810 1,202 (73) 1,917 2,397 1,398 998 60 930 73 1,251 35 316 900 1,327 (76) 1,986 2,542 1,546 996 64 1,069 73 1,434 106 369 959 1,447 (13) 2,189 24 842 865 1,003 115 1,983 48 952 999 633 96 43 1,771 48 1,122 1,169 715 98 49 2,031 48 1,177 1,225 546 93 53 1,917 48 1,342 1,389 446 98 53 1,986 48 1,545 1,592 446 98 53 2,189 FY2010 FY2011 FY2012 FY2013E FY2014E FY2015E

May 2, 2013

10

TVS Motor Company | 4QFY2013 Result Update

Cash flow statement (Standalone)

Y/E March (` cr) Profit before tax Depreciation Change in working capital Others Other income Direct taxes paid Cash Flow from Operations (Inc.)/Dec. in fixed assets (Inc.)/Dec. in investments 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 FY2010 FY2011 FY2012 FY2013E FY2014E FY2015E 76 103 103 112 (67) 12 339 (30) (262) 67 (225) 97 33 (102) 28 142 42 83 101 248 107 (67) 35 (36) (54) 234 (93) 78 36 20 24 (295) 60 (218) (428) (174) 101 (79) 6 316 118 63 33 (22) (67) 441 (177) (270) 22 (425) (72) 72 (150) (150) (135) 6 (142) 13 164 130 45 (15) (24) (48) 253 (100) 62 24 (14) (170) 66 (235) 4 13 17 309 139 25 (25) (73) 375 (150) (61) 25 (185) (100) 72 (172) 18 17 35 360 147 8 (27) (85) 404 (149) (139) 27 (261) 72 (72) 71 35 106

May 2, 2013

11

TVS Motor Company | 4QFY2013 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 (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage (EBIT / Int.) 0.2 0.9 1.1 (0.0) (0.1) 3.9 (0.2) (0.5) 6.2 (0.3) (0.8) 5.8 (0.4) (1.1) 8.1 (0.5) (1.4) 9.3 2.3 26 17 51 15 3.2 24 14 49 4 3.5 28 13 53 (1) 3.2 28 14 57 (3) 3.3 29 14 57 (5) 3.5 27 14 56 (5) 4.4 0.9 14.3 15.2 16.1 21.3 18.5 17.4 22.9 14.1 14.7 17.3 16.6 16.6 18.1 17.9 17.9 18.5 1.9 1.1 2.4 5.2 8.8 0.3 4.0 4.5 0.8 3.4 12.3 7.0 0.1 12.7 4.9 0.8 3.8 14.6 6.7 (0.1) 13.7 3.9 0.7 3.6 10.1 5.4 (0.2) 9.0 4.2 0.8 4.0 12.9 6.2 (0.3) 10.7 4.3 0.8 4.3 14.1 6.9 (0.4) 11.1 1.9 2.5 4.7 0.6 18.2 4.1 4.2 6.4 1.1 21.0 5.2 5.2 7.7 1.3 24.6 2.4 4.4 5.2 1.2 25.8 5.0 5.0 7.9 1.3 29.2 5.8 5.8 8.9 1.3 33.5 15.8 8.5 2.2 1.5 0.5 17.1 1.0 9.5 6.2 1.9 2.8 0.3 4.7 1.0 7.6 5.2 1.6 3.3 0.2 3.5 0.8 16.3 7.7 1.5 3.0 0.2 3.8 0.8 8.0 5.0 1.4 3.3 0.2 3.0 0.7 6.9 4.5 1.2 3.3 0.1 2.2 0.5 FY2010 FY2011 FY2012 FY2013E FY2014E FY2015E

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TVS Motor Company | 4QFY2013 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 Company 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%)

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