TVS Motor Q1 net falls 15 per cent despite 26 per cent rise in revenues

25 July 2006

Buoyed by the success of recently launched motorcycle models like Star City and Apache, TVS Motor has reported good growth in sales for the first quarter of the current financial year. However, rising costs have put tremendous pressure on margins and led to a decline in the bottom line.

For the quarter ended 30 June, 2006, net profits have declined 14.5 per cent to Rs21.29 crore from Rs24.9 crore for the previous year quarter. Total revenues increased 25.85 per cent to Rs939.62 crore from Rs746.6 crore for the prior year quarter.

Net sales increased 25.4 per cent to Rs921.78 crore from Rs735.06 crore for the prior year quarter.

Operating profits declined 16.26 per cent for the quarter and operating margins dropped by 225 basis points. Operating margins as a percentage of net sales declined to 4.51 per cent from 6.76 per cent for the pervious year quarter.

Cost of inputs went up by 28.78 per cent during the quarter, pulling down the margins. Staff costs increased more modestly by 12.93 per cent while other operating expenses were higher by 31.74 per cent.

Net interest costs jumped 147 per cent to Rs5.97 crore from Rs2.42 crore for the previous year quarter while depreciation charges were higher by 2.69 per cent.