Key takeaways of the company

About 28% of the sales are accounted by M&HCV segment, 40% by small utility vehicles, 10-12% by tractors and 10-12% by passenger car. Products of Non TVS lines/companies accounts for 40% of the turnovers of the company with balance coming from TVS group companies/lines. Out of total 45 lines about 8 line accounts for 80% of the revenue.

Currently the company has about 64 outlets. The company continues to open new outlets to better cover the markets. The company will open about 11 outlets in the next 18-24 months. It has opened 5 outlets in the last one 12 months. A new outlet will typically takes about 3 months to turn profitable.

On low base, sales (excluding GST) for the quarter ended June 2018 registered a growth of 18% to Rs 127.75 crore compared to a sales (excluding taxes) of Rs 107.49 crore in corresponding previous period. The growth was largely driven by volume as the price increase was effected only effective July 1, 2018 by most of the lines.

Leaving out the low base effect on account of pre GST implementations sales loss in Q1FY18, the volumes grew by about 8-9% in Q1FY19. The company is hopeful of carrying this growth momentum for the rest of the fiscal.

On account of GST implementation, the demand shift from unorganized to organized was just a marginal so far as there is no strict implementation or penalties on violators. But once government starts taking penal action on violators of new tax regime the fuller benefit will be realized.

Month leading to the festival of Onam is an empirically a weak one in terms of sales for the company's four outlets in Kerala. Moreover there is not more than minimal damage to the stocks at the company's outlets in Kerala due to floods. So there is not much negative impact due to Kerala floods for the company.

Though the Kolkata market is still subdued, the company is gaining market share in rest of the Eastern markets.

CAPL, the subsidiary company did a turnover of Rs 3.6 crore in four months period of December 2017 -March 2018. The company expects CAPL to register revenue over Rs 10 crore in FY19. CAPL is currently having one outlet in Ahmedabad.

Dividend Policy of the company is to pay 25-30% of after tax profit as dividend.

The company will discuss and decide about bonus issue in the meeting of directors.

Forecasts of normal monsoon are likely to spur growth in agriculture and consumption demand in the rural markets where the company has significant presence. However the company could see challenge in the form of policy on scrapping of older vehicles, implementation of BSVI norms. The industry is also faced/challenged by greater push /focus of OEMs on after sales market including retail of spares through dealership and longer life time for automobiles elongated the demand cycle for replacement spares beyond 3 years.