TVS Motor sales dropped by 20 per cent on a yearly basis

TVS Motor, the flagship company of USD 8.5 billion TVS Group, announced its FY20 fourth-quarter result on Thursday. The company reported its net sales at Rs 3,481.42 crore, which is a decline of 20.6 per cent on a yearly basis. For the same quarter last year, it reported sales of Rs 4,384.02 crore. The fall in the revenue was due to a drop in sales of the company. The overall two-wheeler and three-wheeler sales including exports registered 6.33 lakh units in the quarter ended March 2020 as against 9.07 lakh units registered in the quarter ended March 2019. So, there was almost a 30 per cent drop in the sales volume of the company. The company’s total export of two-wheelers and three-wheelers is 2.04 lakh units in the quarter under review as against 1.96 lakh units in the quarter ended March 2019, registering a growth of 4.2 per cent. Three-wheeler sales for the quarter under review are 0.43 lakh units as against 0.42 lakh units during the fourth quarter of 2018-19. The fall in the sales was lower than the sales volume due to the better realisation and product mix that helped it to offset some of the drops in sales.

The company reported EBITDA of Rs 244.85 crore in Q4FY20 and has shown a fall of 20.54 per cent on a yearly basis. EBITDA for Q4FY19 was Rs 308.13 crore. The net profit posted in Q4FY20 was Rs 73.87 crore, which declined by 44.8 per cent as compared to Q4FY19, when it reported Rs 133.83 crore. One of the prime reasons for such a sharp drop was one time additional dealer discount of Rs 22 crore and an exceptional item of Rs 32 crore towards COVID-19.

The net profit margin in Q4FY20 was 2.12 per cent, a decline of -0.91 basis points against Q4FY19 when it was 3.05 per cent. EBITDA margins as of Q4FY20 stood at 7.03 per cent, which is similar to what they posted in the same quarter previous year.