TVS Motor stock slumps to 52-week low

Low volumes growth, competition drive down scrip New Delhi, May 11: The share price of Chennai-based TVS Motor touched its 52-week low of Rs 35.10 during intra-day trade on Friday at the BSE. However, the stock ended marginally higher at Rs 35.40 at close. Market analysts attributed the poor performance of the stock to poor volume growth in 2011-12, apart from a slowdown in demand in the two- and particularly three-wheeler segments. Competition also sharply increased last year, with Japan's Honda Motorcycle rapidly adding fresh two-wheeler capacity. “Hero is doing well, while Honda is very aggressive. With fresh scooter capacity coming from Honda in the second half of 2011-12, TVS has seen a dip in demand for models such as the Scooty Pep and Wego from this January,” Mr Yaresh Kothari, analyst at Angel Broking said. Loses No 2 spot In 2011-12, TVS Motor lost the number three spot in the two-wheeler market to Honda — a company which is expected to claim the number two spot from Bajaj this Auto fiscal. Three-wheeler sales have also performed badly. While the segment fell two per cent (5,13,251 units) in 2011-12, TVS' three-wheeler sales were down 37 per cent (14,172 units). “The stock is cheap right now, trading at 8-9 times of FY-14 volumes. Earlier, it was trading 11-12 times,” another sector analyst said. Mr Kothari added that share prices could improve on new model launches — such as a new bike that is planned, apart from the recently launched new version of the premium bike, Apache. On Friday, TVS Motor stock was down 1.67 per cent (Rs 35.40), though on a year-on-year basis it has slid 34 per cent. While LML has also slipped 22 per cent this year, market leader Hero MotoCorp and Bajaj Auto gained about 18 and three per cent, respectively.