InvestorQ : Why did the profits of TVS Motors fall in the Sep-20 quarter despite higher sales revenues?
Tisha Malhotra made post

Why did the profits of TVS Motors fall in the Sep-20 quarter despite higher sales revenues?

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Moii Chavate answered.
3 weeks ago
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TVS Motors sales for Sep-20 quarter grew 5.93% at Rs.5,254 crore. Operating profits were up 19.5% at Rs.528 crore while net profits were down 29.4% at Rs.181.4 crore. To answer your main question, the sharp fall in net profit was on account of Rs.76 crore that TVS had booked as extraordinary gain in Sep-19 quarter. Hence the fall is actually distorted.

There was some positive movement in the debt position of TVS Motors as its debt equity fell from 0.40 to 0.15. As a result, interest service coverage ratio stood at a healthy 7.57 and debt service coverage at 6.55 times.

For TVS, there was also good news on the cash flows front. Net cash generated from operating activities rose to Rs.1100 crore on efficient working capital management leading to freeing up of funds TVS two-wheeler sales for the quarter stood at 8.34 lakh units.
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