Standalone revenue for the quarter stood at Rs 5,391 crore, a year-on-year growth of 31%. The company sold almost 990,000 vehicles during the quarter, a 20% growth over the previous year.
Profit grew by 119% on-year to Rs 266 crore after adjusting for an exceptional loss during the December quarter of FY20.
Earnings before interest, tax, depreciation and amortisation (EBITDA) improved by 41% to Rs 511 crore. EBITDA margin improved by 68 basis points to 9.5% despite a sharp decline in sales of high-margin three-wheelers.
“During the nine months period (ending December), focused working capital management and improved operating performance helped the company to generate free cash flow of Rs 1,616 crore,” the company said in a statement. These proceeds were used to reduce the debt, it added.
The company declared an interim dividend of Rs 2.1 per equity share.
Analysts at Reliance Securities expect TVS Motor’s domestic volumes to witness a growth of 31% during the second half of FY21 as well as a 14% compounded growth for exports over FY21-FY23 due to strong sales in African markets.
“In view of healthy rural sales, strong products basket, improving brand equity, healthy export potential, better margin trajectory, healthy volumes over the next 2 years and better return ratio, we maintain BUY on (TVS Motor) with a 2-year target price of Rs 575,” said Mitul Shah, head of research at Reliance Securities.