Muted volumes, lower share
Will new products help?
Analysts are cautious. Given the rising competition and recent dip in sales volumes, they have across brokerages revised downwards their FY13 volume estimates for TVS by 2.5-7 per cent.
Margins likely flat
Standalone Ebitda (earnings before interest, taxes, depreciation and amortisation) margins for 2011-12, likely to be in the 7-7.4 per cent range, are likely to fall below seven per cent in 2012-13, feel analysts.
Weak volumes, a low-margin moped business (40 per cent of overall volumes) and higher advertising spending to prevent loss of market share will exert downward pressure on margins, feels LKP Securities analyst Ashwin Patil.
On the other hand, there are doubts over the turnaround of its Indonesian subsidiary which the management believes will achieve breakeven in FY13. Analysts though say it is unlikely to break even (target of 60,000 units) in the current financial year and is likely to add to its margin woes.





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