IGI Logo

Above our estimate; all round beat; highest ever revenue and EBITDA

* Consolidated net revenue grew 24% YoY to ~INR20.4b (v/s our estimate of ~INR18.8b). EBITDA margin increased 140bp YoY (+90bp QoQ) to ~17.3% (v/s our expectation of 16.3%). EBITDA grew 35% YoY to INR3.5b (v/s our estimate of INR3.07b). This translated to adjusted PAT growth of ~INR2b (v/s our expectation of ~INR1.6b).

* India business: Standalone revenue grew 32% YoY to ~INR15.3b (v/s our estimate of ~INR14.3b) as against 14.5% growth for the 2W industry in 3QFY21. Aftermarket revenue rose 28% YoY. Operating leverage benefit boosted EBIDTA margin by 290bp YoY (+80bp QoQ) to 17% (v/s our expectation of 16.5%). EBITDA grew 59% YoY to INR2.6b and adjusted PAT grew 76% YoY to INR1.59b (v/s our estimate of INR1.41b).

* EU business revenue grew 7% YoY to INR5.1b (v/s our expectation of INR4.6b). In EUR terms, revenue for EU subsidiaries fell 3.6% as the number of new car registrations was down 7.6% in 3QFY21. EBITDA margin contracted 220bp YoY to 18% (v/s our estimate of 15.6%), led by higher staff and other expenses. Higher other income and lower tax boosted adjusted PAT by 16.8% YoY to ~INR395m (v/s our estimate of ~INR187m).

* Management commentary: The number of motorcycles/2Ws sold by Indian OEMs in 3QFY21 grew 17.7%/14.5% YoY. Post the relaxation of COVID-led lockdown restrictions, the industry has witnessed a MoM demand recovery at a pace faster than most companies had anticipated. New car registrations in the EU in 9MFY21 were down by 23% YoY. The drop was sharp at 49.7% in 1QFY21, but moderated to 7.2% in 2Q and 7.6% in 3Q. Valuation: The stock trades at 28.2x/23.8x FY22E/FY23E consolidated EPS.

To Read Complete Report & Disclaimer Click Here

For More Motilal Oswal Securities Ltd Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html SEBI Registration number is INH000000412

Above views are of the author and not of the website kindly read disclaimer