Wednesday 12 November 2008

Hold TVS Motor, target of Rs 25: PINC

PINC Research has maintained its hold rating on TVS Motor Company with a 12-month price target revised downwards to Rs 25 in its November 7, 2008 research report. "TVS Motors Ltd. (TVSM) reported a 23% rise in net sales to Rs 10.1 billion on back of a 14% YoY growth in volumes and 9% improvement in realizations aided by price hikes and a richer product-mix. Net profits before exceptional items surged to Rs 102 million against Rs 17 million in Q2FY08. Despite YoY improvement shown in OPM, margins are markedly below industry average of 10-11%."

"Although some improvement in margins is expected in FY10 due to softening in input costs, the same will be curtailed by dependence on economy segment of motorcycles and mopeds. We expect volume growth to be a challenge due to sluggish market conditions, scarcity of finance and strong competition. Hence, we maintain a ‘HOLD’ recommendation with a 12-month price target revised downwards to Rs 25," says PINC's research report.

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Source: Moneycontrol

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