"In Q1FY21E, industry volumes may fall in the range of 40-50 per cent YoY, despite a low base. These two months of subnormal operations (15-25 days of complete closure, i.e., March-April 2020 and corresponding one month of gradual resumption of work) may reduce overall H1FY21E earnings," the analysts said in a report.
“The small players like TVS Motor have a relatively heavy exposure to Covid-19 concentrated location which may witness longer lockdown period, causing a delayed turnaround in their volume growth story. The company will have little financial muscle to secure volume without incurring large hit to profitability,” said analysts at Antique Stock Broking in a auto sector update.
For the month of February, TVS Motor had reported a 15.4 per cent decline in total sales in at 253,261 units as against 299,353 units sold in the same month last year. The Covid-19 has led to the impact on supply of certain components for production of BS-VI vehicles, the company said.
At 10:59 am, TVS Motor was trading 4 per cent lower at Rs 285 on the BSE, as against a 3.5 per cent fall in the S&P BSE Sensex. A combined 1.2 million shares have changed hands on the counter on the NSE and BSE till the time of writing of this report.