CMP: Rs 45 Target Price: Rs 35
The performance of TVS Motor (TVS) in 4QFY09 was mixed bag. Net sales at Rs 9.1 bn (YoY growth of 21.3%), was ahead of expectation of Rs 8.5 bn. EBITDA at Rs 482 mn (YoY change of 103%) was below our expectation of Rs 568 mn. However, a 279% YoY increase in interest expenses to Rs 139 mn and 63% decline in other income to Rs 11 mn, resulted in company reporting a adjusted net profit of Rs 164 mn, which was below expectation of Rs 233 mn. We have derived 4QFY09 performance by subtracting the 9MFY09 performance from FY09 performance.
At consolidated level, TVS reported an EBIDTA of Rs 1.2 bn vs standalone EBIDTA of Rs 1.8 bn for FY09, indicating the investment phase of the Indonesian venture. Also, higher depreciation and interest expense resulted in TVS reporting a recurring loss of Rs 548 mn.
At CMP of 45, the stock trades at PER of 14.9x and 11.4x and EV/EBIDTA of 8.3x and 6.9x our FY10 and FY11 estimates respectively. We maintain our REDUCE rating on the stock.
No comments:
Post a Comment