TVS Motor 4Q FY 2013

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Please refer to important disclosures at the end of this report 1

Quarterly highlights (Standalone)Y/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq)Net Sales 1,748 1,637 6.8 1,799 (2.8)EBITDA 94 99 (5.2) 107 (12.1)

Adj. EBITDA margin (%) 5.4 6.0 (68)bp 5.9 (57)bp

Adj. PAT 58 57 1.6 52 10.8Source: Company, Angel Research

For 4QFY2013, TVS Motor Company (TVSL) reported a weak operating

performance, leading to a 68bp yoy (57bp qoq) decline in EBITDA margins. The

adjusted bottom-line at `58cr (adjusted for exceptional charge) however, was

ahead of our estimates led by 58.2% yoy (52.9% qoq) decline in interest cost andlower tax rate (8% as against 21.7% in 3QFY2013). TVSL recorded an

exceptional charge of `92cr in 4QFY2013 towards provisioning for diminution in

the value of its European subsidiary as a result of which, the company posted a

bottom-line loss of `33cr. TVSL has been impacted the most by the ongoing

slowdown in the two-wheeler industry and has witnessed a significant erosion in its

market share in the domestic scooter (down ~500bp to 14.5%) and motorcycle

(down ~70bp to 5.5%) segments in FY2013. We expect the operating environment

to remain challenging for TVSL in FY2014 given that the competition in the sector

is increasing and also that the demand environment remains sluggish. Werecommend a Neutral rating on the stock.Poor 4QFY2013 performance: TVSLs top-line declined by 2.8% qoq in4QFY2013 to `1,748cr, which was due to a 1.8% qoq decline in volumes onaccount of the slowdown in the two-wheeler industry and increasing competition.

The net average realization too registered a decline of 1.3% qoq on account of

an adverse product-mix. On a yoy basis though, the top-line grew by 6.8% yoy,

driven by a strong 10.9% yoy growth in net average realization on back of a

superior product-mix, comprising a greater proportion of three-wheelers

(2.8% vs 1.5% in 4QFY2012). The EBITDA margin posted a decline of 68bp yoy

(57bp qoq) to 5.4%, against our expectation of 6%, led by a sharp increase in

other expenditure on account of higher marketing spends and increase in power

and distribution expenses. Hence the operating profit declined by 5.2% yoy

(12.1% qoq) to `94cr.

Outlook and valuation: At `40, TVSL is trading at 6.9x FY2015E earnings. Werecommend a Neutral rating on the stock.Key financials (Standalone)Y/E March (` cr) FY2012 FY2013E FY2014E FY2015ENet Sales 7,142 7,065 7,715 8,584% chg 13.6 (1.1) 9.2 11.3

Adj. net Profit 249 207 236 275% chg 25.3 (16.8) 14.2 16.5

EBITDA (%) 6.6 5.8 6.0 6.1

EPS (`) 5.2 4.4 5.0 5.8P/E (x) 7.6 16.3 8.0 6.9

P/BV (x) 1.6 1.5 1.4 1.2

RoE (%) 22.9 17.3 18.1 18.5

RoCE (%) 18.5 14.1 16.6 17.9

EV/Sales (x) 0.2 0.2 0.2 0.1

EV/EBITDA (x) 3.5 3.8 3.0 2.2

Source: Company, Angel Research

NEUTRALCMP `40

Target Price -

Investment Period -

Stock Info

Sector

Bloomberg Code

Shareholding Pattern (%)

Promoters 57.4

MF / Banks / Indian Fls 23.0

FII / NRIs / OCBs 2.2

Indian Public / Others 17.4

Abs. (%) 3m 1yr 3yr

Sensex (0.2) 14.1 12.4

TVS Motor (6.6) (4.1) (17.5)

Automobile

Avg. Daily Volume

Market Cap (`cr)

Beta

52 Week High / Low

Net Debt (`cr) 528

Face Value (`)

BSE Sensex

Nifty

Reuters Code

1.0

19,736

5,999

TVSM.BO

TVSL@IN

1,891

1.0

50/32

287,102

Yaresh Kothari022-3935 7800 Ext: 6844

[email protected]

TVS Motor CompanyPerformance Highlights

4QFY2013 Result Update | Automobile

May 2, 2013

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TVS Motor Company | 4QFY2013 Result Update

May 2, 2013 2

Exhibit 1:Quarterly financial performance (Standalone)Y/E March (` cr) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) FY2013 FY2012 % chg (yoy)Net Sales 1,748 1,637 6.8 1,799 (2.8) 7,065 7,142 (1.1)Consumption of RM 1,200 1,152 4.1 1,256 (4.4) 4,945 5,117 (3.4)

(% of Sales) 68.6 70.4 69.8 70.0 71.7

Staff Costs 93 95 (2.3) 104 (11.0) 407 370 10.0

(% of Sales) 5.3 5.8 5.8 5.8 5.2

Purchase of goods 42 37 14.1 40 5.3 151 144 5.3

(% of Sales) 2.4 2.2 2.2 2.1 2.0

Other Expenses 320 254 25.8 293 9.3 1,152 1,041 10.7

(% of Sales) 18.3 15.5 16.3 16.3 14.6

Total Expenditure 1,655 1,538 7.6 1,693 (2.2) 6,656 6,672 (0.2)Operating Profit 94 99 (5.2) 107 (12.1) 409 469 (12.9)OPM (%) 5.4 6.0 5.9 5.8 6.6

Interest 6 13 (58.2) 12 (52.9) 48 57 (15.9)

Depreciation 35 32 9.3 33 5.9 130 118 11.0Other Income 10 8 16.2 5 98 24 22 9.8

PBT (excl. Extr. Items) 63 62 1.5 67 (5.8) 254 316 (19.6)Extr. Income/(Expense) (91) - - - - (91) - -

PBT (incl. Extr. Items) (28) 62 - 67 - 164 316 (48.3)(% of Sales) (1.6) 3.8 3.7 2.3 4.4

Provision for Taxation 5 5 1.4 15 (65.5) 48 67 (29.4)

(% of PBT) 8.0 8.0 21.7 18.9 21.3

Reported PAT (33) 57 - 52 - 116 249 (53.4)Adj PAT 58 57 1.6 52 10.8 207 249 (16.9)

Adj. PATM 3.3 3.5 2.9 2.9 3.5

Equity capital (cr) 47.5 47.5 47.5 47.5 47.5

Reported EPS (`) (0.7) 1.2 - 1.1 - 2.4 5.2 (53.4)Adjusted EPS (`) 1.2 1.2 1.5 1.1 10.8 4.4 5.2 (16.9)


Exhibit 2:4QFY2013 Actual vs Angel estimatesY/E March (` cr) Actual Estimates Variation (%)Net Sales 1,748 1,800 (2.9)EBITDA 94 108 (13.5)

EBITDA margin (%) 5.4 6.0 (66)bp

Adj. PAT 58 53 10.1Source: Company, Angel Research

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Exhibit 3:Quarterly volume performance(unit) 4QFY13 4QFY12 % chg (yoy) 3QFY13 % chg (qoq) FY2013 FY2012 % chg (yoy)Total volumes 509,210 528,102 (3.6) 518,357 (1.8) 2,032,622 2,197,017 (7.5)Domestic 443,248 471,050 (5.9) 459,463 (3.5) 1,787,033 1,909,906 (6.4)Exports 65,962 57,052 15.6 58,894 12.0 245,589 287,111 (14.5)

MotorcyclesDomestic 137,707 148,536 (7.3) 153,413 (10.2) 558,468 621,722 (10.2)

Exports 49,641 45,861 8.2 44,873 10.6 191,338 221,392 (13.6)

Total motorcycles 187,348 194,397 (3.6) 198,286 (5.5) 749,806 843,114 (11.1)ScootersDomestic 93,936 111,445 (15.7) 107,666 (12.8) 424,188 497,117 (14.7)

Exports 3,881 6,336 (38.7) 4,141 (6.3) 17,369 32,199 (46.1)

Total scooters 97,817 117,781 (17.0) 111,807 (12.5) 441,557 529,316 (16.6)MopedsDomestic 208,502 206,863 0.8 193,677 7.7 788,761 776,866 1.5

Exports 1,247 1,341 (7.0) 985 26.6 3,308 9,076 (63.6)

Total mopeds 209,749 208,204 0.7 194,662 7.8 792,069 785,942 0.8Three-wheelersDomestic 3,103 4,206 (26.2) 4,707 (34.1) 15,616 14,201 10.0

Exports 11,193 3,514 218.5 8,895 25.8 33,574 24,444 37.4

Total three-wheelers 14,296 7,720 85.2 13,602 5.1 49,190 38,645 27.3Source: Company, Angel Research

Top-line slightly lower than expected: For 4QFY2013, TVSLs top-line registered a6.8% yoy growth to `1,748cr, which was slightly lower than our expectation of`1,800cr. The top-line was driven by a strong 10.9% yoy growth in net average

realization on back of a superior product-mix, comprising a greater proportion of

three-wheelers (2.8% vs 1.5% in 4QFY2012). The volumes however registered a

decline of 3.6% yoy, led by the slowdown in the two-wheeler industry and also on

account of increasing competition from Honda Motorcycle and Scooters India Ltd

(HMSI). As a result, scooter volumes registered a sharp decline of 17% yoy while

motorcycle sales declined by a relatively lower 3.6% yoy. Three-wheeler sales on

the other hand continued to witness momentum, posting an 85.2% yoy (5.1% qoq)

growth. On a sequential basis though, the top-line posted a decline of 2.8%

following a 1.8% and 1.3% decline in total volumes and net average realization

respectively.

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Exhibit 4:Total volumes down 3.6% yoy


Exhibit 5:Strong growth in net average realization


Exhibit 6:Muted growth in top-line


Exhibit 7:Domestic market share trend

Source: Company, SIAM, Angel Research

EBITDA margin contracts further to 5.4%: On the operating front, the EBITDAmargin remained under pressure and contracted further to 5.4%, a decline of

68bp yoy (57bp qoq) due to a sharp increase in other expenditure on a yoy as well

as sequential basis. Other expenditure on an absolute basis surged 25.8% yoy

(9.3% qoq) largely due to higher marketing spends and increase in power and

distribution expenses. On the positive side the company benefitted from lower

raw-material and employee expenses. While raw-material cost as a percentage of

sales declined 159bp yoy (97bp qoq), employee expenditure as a percentage of

sales declined 50bp on a yoy as well as qoq basis.

The Management expects to benefit from the softening commodity prices; however,

other expenditure is likely to remain at higher levels given the weak domestic

demand scenario and increasing competition which would necessitate higher

promotional expenditure.

519,514535,008

604,226

529,681528,102 519,132 485,923 518,357 509,210

24.0

15.3

15.1

1.1 1.7

(3.0)

(19.6)

(2.1)

(3.6)

(25.0)

(20.0)(15.0)

(10.0)(5.0)

0.05.0

10.015.020.0

25.030.0

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%)(units) Total volume yoy growth (RHS)

30,968

31,91132,300

32,960

30,541

34,50234,196 34,344

33,8828.9

8.1 6.77.1

(1.4)

8.1

5.9

4.2

10.9

(2.0)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

28,000

29,000

30,000

31,000

32,000

33,000

34,000

35,000

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%)(`) Ne t ave rage realization yoy growth (RHS)

1,6351,746

1,9911,775

1,6371,820

1,6911,799 1,748

34.525.3 23.2

7.8

0.14.2

(15.1)

1.36.8

(20.0)

(10.0)

0.0

10.0

20.0

30.0

40.0

0

500

1,000

1,500

2,000

2,500

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%)(`cr) Net sales (LHS) Net sales growth (RHS)

21.3 20.522.9

19.4

15.4 15.3 16.014.2

12.6

6.8 6.3 6.9 5.6 5.9 5.4 5.3 5.8 5.6

3.5 2.3 2.6 2.8 3.2 2.9 3.33.1 2.3

14.7 14.3 15.2 13.5 13.6 12.8 13.1 12.6 12.9

0.0

5.0

10.0

15.0

20.0

25.0

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%) Scooters Motor Cycles

Three Wheelers Total Two Wheelers

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Exhibit 8:EBITDA margin pressures continues


Exhibit 9:Adjusted net profit aided by lower interest cost


Adjusted net profit aided by lower interest cost: For 4QFY2013, the adjustedbottom-line at `58cr (adjusted for exceptional charge), was ahead of our estimates

led by 58.2% yoy (52.9% qoq) decline in interest cost and lower tax rate (8% as

against 21.7% in 3QFY2013). TVSL recorded an exceptional charge of `92cr in

4QFY2013 towards provisioning for diminution in the value of its European

subsidiary as a result of which, the company posted a bottom-line loss of `33cr.

5.9 6.7 7.0 7.2 6.0 5.9 6.0 5.9 5.4

74.6 76.9 75.9 73.2 72.6 74.6 73.6 72.0 71.0

0.0

10.0

20.0

30.0

40.0

50.0

60.070.0

80.0

90.0

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%) EBITDA margin Raw material cost/sales

44 59 77 57 57 51 45 52 58

2.7

3.4

3.9

3.2

3.5

2.8 2.72.9 3.3

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0

10

20

30

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70

80

90

4QFY11

1QFY12

2QFY12

3QFY12

4QFY12

1QFY13

2QFY13

3QFY13

4QFY13

(%)(`cr) Net profit (LHS) Net profit margin (RHS)

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Investment arguments

Success of new launches key to volume growth: TVSL registered a 7.5% yoydecline in its total volumes in FY2013 due to the slowdown in

two-wheeler demand and rising competitive intensity in the sector.

Nonetheless, TVSL plans to launch two scooters, one motorcycle and a diesel

three-wheeler in FY2014, and we believe the success of these new launches is

key for the company to register volume growth going ahead. We expect the

new launches coupled with the recent launch of Phoenix to enable TVSL to

register a volume growth of ~6% over FY2013-15E.

Limited room for margin expansion: The Management expects operatingmargins to remain under pressure going ahead as rising competition coupled

with new launches would necessitate higher advertisement and promotional

expenditure which would negate the benefits of softening commodity prices.

We believe that will keep margins under pressure. We expect the companys

margin to remain around 6% in FY2014/15.

Tie-up with BMW positive in the long run: TVSL has entered into a long termco-operation agreement with BMW's motorcycle division, BMW Motorrad to

develop and produce new series of motorcycles that will cater to the sub 500cc

segment. As a part of the deal, TVSL will invest EUR20mn in the collaboration,

which is expected to introduce a new product in 2015. We see this as a

positive development for TVSL and a step in the right direction as the

BMW association will provide technological access to the company. The tie-up

is also expected to help TVSL expand its presence in the premium motorcycle

space, where it currently offers the Apache (160cc and 180cc) series. In the

near term though, we believe that this agreement is unlikely to alter the current

positioning of the company in the domestic motorcycle industry.

Outlook and valuation

TVSL has been impacted the most by the ongoing slowdown in the two-wheeler

industry and has witnessed a significant erosion in its market share in the domestic

scooter (down ~500bp to 14.5%) and motorcycle (down ~70bp to 5.5%)

segments in FY2013. Going ahead in FY2014, TVSL is expected to launch two

scooters, one motorcycle and a diesel three-wheeler, which is expected to enablethe company to recover some lost ground in FY2014. We largely maintain our

FY2014/15 volume, revenue and earnings estimates for TVSL. We expect the

company to register a volume CAGR of ~6% over FY2013-15E aided by ~11%

and ~6% volume CAGR in the three-wheeler and two-wheeler segments

respectively.

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Exhibit 10:Change in estimatesY/E March Earlier Estimates Revised Estimates % chg

FY2014E FY2015E FY2014E FY2015E FY2014E FY2015ENet Sales (` cr) 7,714 8,532 7,715 8,584 0.0 0.6OPM (%) 6.1 6.3 6.0 6.1 (5)bp (19)bp

EPS (`) 4.8 5.8 5.0 5.8 2.7 0.3Source: Company, Angel Research

At the current market price of `40, TVSL is trading at 6.9x FY2015E earnings. Werecommend a Neutral rating on the stock.

Exhibit 11:Key assumptionsY/E March FY2010 FY2011 FY2012 FY2013E FY2014E FY2015ETotal volume (units) 1,536,895 2,032,404 2,196,138 2,032,515 2,138,582 2,298,738Motorcycles 640,965 836,821 841,362 749,973 776,222 822,795Scooters 309,501 452,006 529,095 441,634 476,965 534,200

Mopeds 571,563 703,717 785,942 792,069 831,672 881,573

Three-Wheelers 14,866 39,860 39,739 48,839 53,723 60,170

Change yoy (%) 16.3 32.2 8.1 (7.5) 5.2 7.5Motorcycles 1.0 30.6 0.5 (10.9) 3.5 6.0

Scooters 25.7 46.0 17.1 (16.5) 8.0 12.0

Mopeds 31.2 23.1 11.7 0.8 5.0 6.0

Three-Wheelers 205.0 168.1 (0.3) 22.9 10.0 12.0

Domestic (units) 1,371,481 1,797,993 1,909,672 1,786,887 1,871,259 1,988,409Exports (units) 165,414 234,411 286,466 245,628 267,323 310,330


Exhibit 12:Angel vs consensus forecastAngel estimates Consensus Variation (%)FY14E FY15E FY14E FY15E FY14E FY15E

Total op. income (` cr) 7,715 8,584 7,837 8,681 (1.6) (1.1)EPS (`) 5.0 5.8 5.0 6.0 0.4 (3.2)

Source: Bloomberg, Angel Research

Exhibit 13:One-year forward P/E band


Exhibit 14:One-year forward P/E chart


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(x) One-yr forward P /E Three-yr average P/E

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Exhibit 15:One-year forward EV/EBITDA band


Exhibit 16:Two-wheeler stocks performance vs Sensex


Exhibit 17:Automobile - Recommendation summaryCompany Reco. CMP(`) Tgt. price(`) Upside(%)

P/E (x) EV/EBITDA (x) RoE (%) FY13-15E EPSFY14E FY15E FY14E FY15E FY14E FY15E CAGR (%)

Ashok Leyland Buy 23 27 15.8 11.7 8.6 5.3 4.5 12.1 15.2 43.9

Bajaj Auto Accumulate 1,860 2,014 8.3 15.8 13.9 10.6 8.9 40.2 36.6 13.8

Hero MotoCorp Accumulate 1,613 1,819 12.8 14.6 11.5 7.5 6.7 39.8 40.7 14.9

Maruti Suzuki Accumulate 1,680 1,847 9.9 15.6 13.6 7.8 6.7 16.2 16.0 24.7

Mahindra & Mahindra Accumulate 955 1,006 5.4 16.0 14.0 8.8 7.3 22.3 21.6 11.5

Tata Motors Accumulate 296 327 10.2 9.1 7.5 4.2 3.5 23.4 23.3 17.6

TVS Motor Neutral 40 - - 8.0 6.9 3.0 2.2 18.1 18.5 15.3Source: Company, Angel Research

Company background

TVS Motor (TVSL), a flagship company of the TVS Group, is the third largest 2W

manufacturer in India. The company is present across the motorcycles, scooters

and mopeds segments, having a market share of ~8%, ~22% and 100%,

respectively. The company successfully ventured into the 3W segment in FY2009

and has garnered a market share of 6.6% as of March 31, 2013. The company

has three manufacturing facilities in India, located at Hosur (Tamil Nadu), Mysore

(Karnataka) and Solan (Himachal Pradesh) with 2W and 3W capacity of 2.75mn

and 75,000 units, respectively. TVSL is also the second largest exporter oftwo-wheelers in the country.

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TVSL HMCL BJAUT Sensex

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Profit and loss statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015ETotal operating income 4,430 6,288 7,142 7,065 7,715 8,584% chg 18.5 41.9 13.6 (1.1) 9.2 11.3Total expenditure 4,243 5,896 6,672 6,656 7,252 8,064Net raw material costs 3,137 4,614 5,261 5,097 5,535 6,180

Other mfg costs 133 171 202 234 270 296

Employee expenses 248 327 370 407 455 511

Other 724 784 839 918 991 1,076

EBITDA 187 392 469 409 463 520% chg 0.4 109.2 19.7 (12.8) 13.2 12.4

(% of total op. income) 4.2 6.2 6.6 5.8 6.0 6.1

Depreciation & amortization 103 107 118 130 139 147

EBIT 85 285 352 279 324 373% chg 1.3 235.5 23.5 (20.8) 16.2 15.1


Interest and other charges 75 72 57 48 40 40

Other income 67 36 22 24 25 27

Recurring PBT 76 248 316 254 309 360% chg 144.9 225.7 27.5 (19.6) 21.3 16.5

Extraordinary income/(exp.) (32) (4) 0 91 - -

PBT 108 252 316 164 309 360Tax (12) 54 67 48 73 85

(% of PBT) (11.0) 21.2 21.3 29.1 23.5 23.5

PAT (reported) 88 195 249 116 236 275ADJ. PAT 120 199 249 207 236 275% chg 306.6 65.7 25.3 (16.8) 14.2 16.5


Basic EPS (`) 1.9 4.1 5.2 2.4 5.0 5.8Adj. EPS (`) 2.5 4.2 5.2 4.4 5.0 5.8% chg 306.6 65.6 25.3 (16.8) 14.2 16.5

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May 2, 2013 10

Balance sheet statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015ESOURCES OF FUNDSEquity share capital 24 48 48 48 48 48Reserves & surplus 842 952 1,122 1,177 1,342 1,545

Shareholders Funds 865 999 1,169 1,225 1,389 1,592Total loans 1,003 633 715 546 446 446

Deferred tax liability 115 96 98 93 98 98

Other long term liabilities - - - - - -

Long term provisions - 43 49 53 53 53

Total Liabilities 1,983 1,771 2,031 1,917 1,986 2,189APPLICATION OF FUNDSGross block 1,909 1,972 2,154 2,251 2,397 2,542

Less: Acc. depreciation 953 1,035 1,129 1,259 1,398 1,546

Net Block 956 938 1,026 991 998 996Capital work-in-progress 27 57 53 56 60 64

Goodwill - - - - - -

Investments 739 661 931 869 930 1,069Long term loans and advances - 96 53 73 73 73

Other noncurrent assets - - - - - -

Current assets 965 1,106 1,078 1,129 1,251 1,434

Cash 101 6 13 17 35 106

Loans & advances 354 301 247 302 316 369

Other 511 799 819 810 900 959

Current liabilities 734 1,086 1,110 1,202 1,327 1,447

Net current assets 231 19 (31) (73) (76) (13)Misc. exp. not written off 30 - - - - -

Total Assets 1,983 1,771 2,031 1,917 1,986 2,189

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Cash flow statement (Standalone)

Y/E March (` cr) FY2010 FY2011 FY2012 FY2013E FY2014E FY2015EProfit before tax 76 248 316 164 309 360

Depreciation 103 107 118 130 139 147Change in working capital 103 (67) 63 45 25 8

Others 112 35 33 (15) - -

Other income (67) (36) (22) (24) (25) (27)

Direct taxes paid 12 (54) (67) (48) (73) (85)

Cash Flow from Operations 339 234 441 253 375 404(Inc.)/Dec. in fixed assets (30) (93) (177) (100) (150) (149)

(Inc.)/Dec. in investments (262) 78 (270) 62 (61) (139)

Other income 67 36 22 24 25 27

Cash Flow from Investing (225) 20 (425) (14) (185) (261)Issue of equity - 24 - - - -

Inc./(Dec.) in loans 97 (295) (72) (170) (100) -

Dividend paid (Incl. Tax) 33 60 72 66 72 72

Others (102) (218) (150) - - -

Cash Flow from Financing 28 (428) (150) (235) (172) (72)Inc./(Dec.) in cash 142 (174) (135) 4 18 71

Opening Cash balances 42 101 6 13 17 35Net cash credit adjustment 83 (79) (142) - - -Closing Cash balances 101 6 13 17 35 106

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Key ratios

Y/E March FY2010 FY2011 FY2012 FY2013E FY2014E FY2015EValuation Ratio (x)P/E (on FDEPS) 15.8 9.5 7.6 16.3 8.0 6.9P/CEPS 8.5 6.2 5.2 7.7 5.0 4.5

P/BV 2.2 1.9 1.6 1.5 1.4 1.2

Dividend yield (%) 1.5 2.8 3.3 3.0 3.3 3.3

EV/Sales 0.5 0.3 0.2 0.2 0.2 0.1

EV/EBITDA 17.1 4.7 3.5 3.8 3.0 2.2

EV / Total Assets 1.0 1.0 0.8 0.8 0.7 0.5

Per Share Data (`)EPS (Basic) 1.9 4.1 5.2 2.4 5.0 5.8

EPS (fully diluted) 2.5 4.2 5.2 4.4 5.0 5.8

Cash EPS 4.7 6.4 7.7 5.2 7.9 8.9

DPS 0.6 1.1 1.3 1.2 1.3 1.3

Book Value 18.2 21.0 24.6 25.8 29.2 33.5

DuPont AnalysisEBIT margin 1.9 4.5 4.9 3.9 4.2 4.3

Tax retention ratio 1.1 0.8 0.8 0.7 0.8 0.8

Asset turnover (x) 2.4 3.4 3.8 3.6 4.0 4.3

ROIC (Post-tax) 5.2 12.3 14.6 10.1 12.9 14.1

Cost of Debt (Post Tax) 8.8 7.0 6.7 5.4 6.2 6.9

Leverage (x) 0.3 0.1 (0.1) (0.2) (0.3) (0.4)

Operating ROE 4.0 12.7 13.7 9.0 10.7 11.1

Returns (%)ROCE (Pre-tax) 4.4 15.2 18.5 14.1 16.6 17.9

Angel ROIC (Pre-tax) 0.9 16.1 17.4 14.7 16.6 17.9

ROE 14.3 21.3 22.9 17.3 18.1 18.5

Turnover ratios (x)Asset Turnover (Gross Block) 2.3 3.2 3.5 3.2 3.3 3.5

Inventory / Sales (days) 26 24 28 28 29 27

Receivables (days) 17 14 13 14 14 14

Payables (days) 51 49 53 57 57 56

WC cycle (ex-cash) (days) 15 4 (1) (3) (5) (5)

Solvency ratios (x)Net debt to equity 0.2 (0.0) (0.2) (0.3) (0.4) (0.5)

Net debt to EBITDA 0.9 (0.1) (0.5) (0.8) (1.1) (1.4)

Interest Coverage (EBIT / Int.) 1.1 3.9 6.2 5.8 8.1 9.3

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Disclosure of Interest Statement TVS Motor Company

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TVS Motor 4Q FY 2013