TVS Motor jumps 5% as company reports profit after a loss-making quarter last year
- Automotive manufacturer TVS Motor reported a net profit of ₹53.15 crore in June quarter against a loss of ₹139.07 crore during the same period last year.
- The stock was among the top gainers on the Nifty Auto index.
- Analysts believe Indian two-wheeler demand will pick up soon.
The company reported a net profit of ₹53.15 crore against a net loss of ₹139.07 crore during June quarter last year. Operating revenue increased to ₹3,934 crore as against ₹ 1,432 crores last year.
Moreover, the Chennai-based automotive manufacturer has recorded the highest ever quarterly revenue in international business.
AdvertisementThe company is expecting good international and domestic demand with gradual opening of markets.
Overall two-wheeler and three-wheeler sales including exports jumped to 6.58 lakh units from 2.67 lakh units last year. It recorded the highest two-wheeler exports this quarter at 2.90 lakh units.
Global brokerage firm Jefferies reportedly said that the company’s gross margin fell just 40 basis points quarter-on-quarter despite severe commodity cost pressures. “TVS Motor’s exports are holding up well and margins should expand sequentially,” said Jefferies report with a target price of ₹800 per share.
At 12:45 p.m., the company stock was trading 5% higher at ₹588.80.
Besides, analysts at Jefferies believe Indian two-wheeler demand should recover from an abnormal cyclical trough.
AdvertisementA report by Citi said it was positively surprised by TVS’ first quarter realisations. “While higher capital costs (depreciation+interest) resulted in a profit after tax (PAT) miss, the company’s pricing and gross margin trends have been commendable,'' Citi said reportedly.
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