Company Profile: TVS Motors

Company Profile

TVS Motors is one of the smaller players in the 2W (and 3W) segment, and market leader in mopeds. Its key products are Apache, Star, Jive, Flame (all motorclycles), Scooty, and XL Super (moped). As a part of its plan to tap the overseas market, it has commissioned a plant in Indonesia.

It is part of the Sundaram Group, and current MD Venu Srinivasan holds 61% of the company. 7% shares are held by FIIs, and rest is held domestically.

Segmentation

Bulk of the sales for the company comes from the motorcycle segment (which is the largest segment as well). In addition, the company is fairly big in mopeds as well. Motorcycles and Mopeds each contribute roughly 40% of the overall sales (in units). Rest is made up by scooters and 3-wheelers.

The company is focusing on exports going ahead, and has a plant in Indonesia.

Financials

Its product mix is inferior to the top players, and it is present in a lot of low-margin segments (scooters as well as mopeds make up 50% of its total volume). As a result, its operating margins are lower than the industry, EBITDA levels as 7-8% (as against 15% for the top players).

The company has a core EPS of INR 2.5, and is trading at PE of 30. Its balance sheet is much smaller than HH and Bajaj, and it also lacks the resources to counter the competition.