Company – TVS Motors

Financial Year – 2020-21

Sector – Automobile Two Wheeler
 Introduction
 TVS Motors was founded by T. V. Sundram
Iyengar in the year 1911.

 TVS Motor Company is an Indian multinational

automotive company that manufactures
motorcycles, scooters, and Three-wheelers,
headquartered in Chennai, India. It is the third
largest motorcycle company in India with a
revenue of over ₹20,000 crore in 2018–19.

 TVS Motor has footprints globally, including

geographies like Middle East, Africa, SE Asia,
Indian subcontinent, Latin & Central America.
 Introduction
 TVS Motor manufactures the largest range of 2-
wheelers, starting from mopeds, to scooters,
commuter motorcycles, to racing inspired bikes like
the Apache series and the RR310.

 The company has four manufacturing plants, three

located in India (Hosur in Tamil Nadu, Mysore in
Karnataka and Nalagarh in Himachal Pradesh) and one
in Indonesia at Karawang.
Consolidated Statement Of Profit And Loss
 Income Statement Analysis
Sales Growth Rate Mar-19 Mar-20 Mar-21
Revenue from operation/Sales 20,159.99 18,901.14 19,468.04
Sales Growth Rate / Year to Year Growth – 3.03%

Analysis:

 Sales is highest in Mar-19, at Rs 20,187.13 and after that the sale has drop in financial
year 2020 due to pandemic and now again in financial year 2021 it has increased.

 Sales Growth Rate = (Latest Year Sales - Previous Year Sales)/Previous Year Sales *
100

 For the latest financial year Mar-2021, the sales growth rate is 3.03% which is higher
than the previous year.
 Income Statement Analysis
Operating Profit Margin Mar-19 Mar-20 Mar-21
Revenue from operations / Sales 20159.99 18,849.31 19,420.82
EBITDA/Operating Profits 2162.03 2,273.05 2,237.83
OPM 10.72% 11.87% 11.71%

Analysis:

 Operating Profit Margin = Operating Profits / Sales * 100

 Operating profit margins of 11.71% in FY21 is lower than the previous year, which
indicates that the company is not earning enough money from business operations to
pay for all of the associated costs involved in maintaining the business.
 Income Statement Analysis
Net Profit Margin Mar-19 Mar-20 Mar-21
Revenue from operation/Sales 20159.99 18,849.31 19,420.82
Profit After Tax / Net Profits 704.67 737 634
NPM 3.49% 3.91% 3.26%

Analysis:

 Net Profit Margin = Net Profit / Sales * 100

 Net profit is in the range of 3% to 4% in the past three years which is not a sound
position for the company.
 Financial Ratios
Inventory Turnover Ratio (X) Mar-19 Mar-20 Mar-21
The inventory turnover measures how fast is the 15.49 15.81 14.54
inventory moving through the firm and generating
sales.

Analysis:

 The inventory turnover was 15.81 times in FY20 which decreased to 14.54 times in
FY21.

 Here, the inventory turnover reflects the deficiency of inventory management system
for TVS Motors.
 Financial Ratios
Current Ratio (X) Mar-19 Mar-20 Mar-21
The ratio indicates the ability of the firm to meet 0.78 0.72 0.75
its short term obligation (working capital needs)

Analysis:

 In FY21 the current ratio stood at 0.75 which is increased from previous year.

 However, the current ratio is average enough for TVS Motors

 Financial Ratios
Debt to Equity Ratio (x) Mar-19 Mar-20 Mar-21
This is a very important ratio to judge the financial 2.57 2.74 2.44
soundness of a company.

Analysis:

 The Debt to Equity ratio has increased in Mar-2020 and then declined in Mar-2021.

 The company has lower Debt to Equity ratio which stood at 2.44 in FY21, which means
the company is financially sound.
 Financial Ratios
Interest Coverage Ratio (%) Mar-19 Mar-20 Mar-21
The ratio indicates the level of comfort a company 2.63 2.07 1.95
has in meeting its interest obligation.

Analysis:

 The interest coverage ratio has been on declined from Mar-2019 to Mar-2021.

 Though the company is into a comfort level to meets its current financial obligation
but needs improvement.
 Financial Ratios
Return on Capital Employed (%) Mar-19 Mar-20 Mar-21
The ratio shows the capacity of earning profits in a 24.06% 18.29% 17.24%
given level of investment or capital employed.

Analysis:

 The ROCE (%) stood at 17.24% in FY21 which is lowest in the past three years.

 This shows that the company is struggling to make sales and generate profit.
 Financial Ratios
Return on Assets (%) Mar-19 Mar-20 Mar-21
ROA gives an idea as to how efficient management 8% 6.33% 6%
is at using its assets to generate earnings.

Analysis:

 The ROA from past three years is declining every year and it is reduced by 0.33% in
FY21 compared to the previous year.

 The company is having hard time in managing its assets and generating profits.
 Financial Ratios
Return on Networth / Equity (%) Mar-19 Mar-20 Mar-21
ROE measures the profitability of equity fund 20.02% 16.36% 14.67%
invested in the company.

Analysis:

 The ROE of the company stood at 16.36% in the FY20 which is decreased in the FY21
to 14.67%.

 This shows that the profitability of the company with relates to equity funds has
decreased continuously in previous years.
 Financial Ratios
Basic EPS (Rs.) Mar-19 Mar-20 Mar-21
Basic earnings per share (EPS) tells investors how 14.11 12.47 12.88
much of a firm's net income was allotted to each
share of common stock.

Analysis:

 In the FY20 the basic EPS stood at 12.47 which increased in FY21 to 12.88, the net
income allotted to each share of common stock has increased.
 Financial Ratios
Diluted EPS (Rs.) Mar-19 Mar-20 Mar-21
Diluted EPS calculates a company’s earnings per 14.11 12.47 12.88
share if all convertible securities were converted.

Analysis:

 Dilutive EPS is considered a conservative metric because it indicates a worst-case

scenario in terms of EPS.

 Here for TVS, the diluted EPS is almost the same as basic EPS.
 Financial Ratios
Book Value/Share (Rs.) Mar-19 Mar-20 Mar-21
The ratio indicates the level of comfort a company 70.46 76.15 87.79
has in meeting its interest obligation.

Analysis:

 The Book Value/Share has been increasing consistently from Financial Year Mar-2019
to Mar-2021
 Financial Ratios
Dividend (Rs.) Mar-19 Mar-20 Mar-21
Dividend/Share (Rs.) 3.5 3.5 3.5
Dividend Pay-out Ratio 24.81% 28.01% 27.16%

Analysis:

 Dividend Pay-out Ratio for FY21 stood at 27.16%, which was lower than the previous
year, but higher than FY19. So the dividend pay-out was satisfactory.

 Dividend Per Share was constant throughout the three financial years i.e. Rs. 3.5
 Financial Ratios
Price to Earning Ratio Mar-19 Mar-20 Mar-21
The price-to-earnings ratio (P/E ratio) is the ratio 33.38 23.87 45.41
for valuing a company that measures its current
share price relative to its per-share earnings (EPS).

Analysis:

 In FY21 the P/E ratio was the highest in three year to 45.41 times, however the P/E
ratio has been lowest for FY20 i.e. 23.87 times.

 However once compared with the industry average P/E, a better analysis can be
performed.
 Peer Comparison
Net
Sr. Net Debt
Company Mcap TTM ROE Profit Net Sales
No Price P/B Profit to
Name (Cr) PE (%) Margin (Rs.)
. (Rs.) Equity
(%)
1
TVS Motor 581.05 27,604.94 46.45 6.55 15.52 615 3.16 19,420 2.44

2 Bajaj Auto 3,821.40 110,578.71 19.64 4.05 17.8 4,550 16.40 27,741 0

Hero
3 2,793.85 55,818.30 19.13 3.59 18.92 2,982 9.63 30,959 0.02
MotoCorp
Mean
Sector PE 24.41 Benchmark 0.82
D/E
 Peer Comparison

Analysis:

 Market Capitalization (Rs.): Bajaj Auto has the highest market capitalization
standing at Rs. 110,578.71 Cr., Second stands Hero MotoCorp at Rs. 55,818.30
Cr., and last stands TVS Motor at Rs. 27,604.94 Cr.

 Net Profit Margin (%): Bajaj Auto has the highest net profit margin of 16.40%,
while TVS has the least net profit margin of 3.16%.

 Debt to Equity(x): Bajaj Auto has the best debt to equity ratio of 0, and TVS at
the worst debt to equity ratio of 2.44 while Hero MotoCorp stands close to Bajaj
Auto at 0.02.
Team
Members: Dhanlaxmi Gainer – 29
Sumedh Jadhav - 40
Vikas Jaiswal - 43
Dharna Kasliwal - 48
Divyanshu Kumar - 53
Nidhi Kuril – 54
Pooja Makwana - 56
 Sources

 Annual Report of TVS Motor from the official website of the financial year Mar-
2019 to Mar-2021.

 Money control: Annual Report Analysis.

 Screener: Annual Report Analysis .