Motorcycles sales to drive TVS Suzuki in H1
tvssuzuki.com
Thursday October 28, 1:10 am Eastern Time
By Suresh Seshadri
MADRAS, India, Oct 28 (Reuters) - Earnings at India's TVS Suzuki Ltd are seen riding higher on strong motorcycles sales for the first half of 1999/2000 (April-March), analysts said on Thursday.
K.C. Ganesh, equity analyst at Carlson Investments, forecast a net profit of 470-480 million rupees ($10.8-$11.0 million) for the six months ended September 30.
The company posted a net profit of 434.9 million rupees in the corresponding six-month period last year.
TVS Suzuki, based in the southern Indian city of Madras, releases its results on Friday. Japan's Suzuki Motor Corp holds a 25.9 percent stake in the firm, which manufactures motorcycles, mopeds and scooters.
Total sales for the April-September period rose 24 percent to 413,244 units, against 334,377 units in the year-ago period.
Analysts said the firm's sales revenues would grow by about 30 percent in the six-month period, helped by steady growth in the high-margin motorcycle segment and higher product prices.
``There's been a bit of a deceleration, especially in the mopeds segment in September, which should be offset by the price increases which have happened over the second quarter and the growth in motorcycles,' Ganesh said.
Motorcycles sales grew 31 percent to 161,541 units in the six-month period, the firm said in a statement earlier this month.
``The company has consciously chosen to market its scooters and mopeds at a slower pace and concentrated on the motorcycles mainly because the margins are best in motorcycles,' said Ashu Dutt, research head at Dutt Stockbroking Ltd.
Analysts said the firm appeared well positioned for future growth.
``As they're one of the most efficient companies in cost terms, we think they're well positioned for future growth, especially by leveraging on the brand image, and they should be ending the year with 30-32 percent growth in profits,' Dutt said.
Analysts said a scooter plant commissioned in September 1998 would push depreciation and interest charges up by about 20-30 percent in the second quarter against the year-ago period.
The company was likely to step up its scooter sales in the next two quarters.
``While scooter sales are currently only at 500-600 units a month levels, the launch of a new stripped-down model, should see sales picking up from the third-quarter onwards,' Ganesh said.
($1 = 43.39 Indian Rupees) |
