A company is said to be ‘fundamentally strong’ when it runs its operations on lower debt levels and possesses the ability to survive stressful scenarios in the industry and the economy as a whole.
Listed below is one of such fundamentally strong companies engaged in the Automobile sector:
TVS Motor Company Limited
TVS Motor Company Limited is an Automobile manufacturing company based in India primarily focusing on the production of two-wheeled vehicles. It principally carries out the business of manufacturing scooters, motorcycles, three-wheelers, and spare parts related to the above. The company is able to generate a majority of its revenue from the ‘Automotive vehicles’ division.
The company, with a market capitalization of Rs 57,720 crores, announced its Q4 as well as annual results pertaining to FY22-23. During the first week of May, the company’s stock rose about 6.3 percent ranging from Rs 1,143 to the last closing level of Rs 1,215.
Having a quick walkthrough of the financials reported by the company, the operating revenues, as well as PAT figures, showcased a decent amount of growth on a YoY basis with the former increasing from Rs 24,355 crores during FY21-22 v/s Rs 31,974 crores in FY2-23 and the latter, during the same period, shifting from Rs 731 crores to Rs 1,310 crores which exhibits an increase of a huge 80 percent.
On a quarterly basis, the above-mentioned metrics moved in opposite directions with the operating revenues, on one hand, marginally moving down from Rs 8,066 crores in Q3 to Rs 8,031 crores in Q4 and, net profits, on the other hand, going up from Rs 304 crores to Rs 336 crores keeping the timeframe the same.
Moreover, the company, being involved in a capital-intensive line of business, has reported healthy net profit margins with the most recent shift from 3 percent during FY21-22 to 4.1 percent in FY22-23. Another metric to highlight is the interest coverage ratio of the company which has improved from 7.2 times to 8.2 times during the same time horizon.
As per the latest data available for the quarter ending March 2023, the promoters hold a 50.27 percent stake in the company, and Foreign Institutional Investors (FIIs) hold a 17.02 percent stake in the company.
Written by Amit Madnani
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
