Chennai-based TVS Motor Company Ltd. is having a tough time meeting street estimates on profitability.
The two-wheeler maker has missed margin estimates for four out of the last five quarters. Last quarter too, the company fell short of analysts' forecast, weighed down by rising input costs, wage increases and higher ad spends.
TVS Motor's management, in a recent call with analysts, maintained a double-digit guidance for margins but didn't provide a time frame as to how it would achieve it.
The stockbroking firm Prabhudas Lilladher said it would be an uphill task for the company, given the uptick in the commodity cycle and the implementation of BS-VI norms, which would limit their ability to pass on costs to consumers.
Motilal Oswal cut TVS Motor's earnings target for the next financial year by 12 percent to factor in rising input costs.
Twenty-two of the 42 analysts tracking the stock on Bloomberg have a "sell" rating on the stock. On a year-to-date basis, its stock has dropped 23 percent, trailing the Nifty Auto index, which is down 7 percent.
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