TVS Motor Shares At Record High: TVS Motor, one of the country’s leading two-wheeler and three-wheeler manufacturers, saw its shares spike by 5.6 per cent in early morning trade, reaching an all-time high of Rs 2618 apiece after brokerages retained their bullish stance on the counter following its first-quarter earnings.
During Q1, the company reported a 23 per cent increase in consolidated net profit, reaching Rs 577 crore for the quarter ended June 30, compared to Rs 468 crore in the same period last year.
The company, post-market hours on Tuesday, reported a 16 per cent increase in revenue from operations, totaling Rs 8,376 crore compared to Rs 7,218 crore in the quarter ended June 2023.
TVS Motor posted its highest ever operating EBITDA of Rs 960 crore, a growth of 26 per cent for the first quarter of 2024–25, compared to Rs 764 crore in the first quarter of 2023–24. Its operating EBITDA margin improved significantly by 90 basis points to 11.5 per cent, up from 10.6 per cent in the quarter ended June 2023.
During the current quarter, the company’s profit after tax (PAT) grew by 23 per cent to Rs 577 crore, compared to Rs 468 crore in the first quarter of 2023–24.
Global brokerage firm Phillip Capital noted that the company’s margins continue to impress due to a better mix and sustained cost reduction. While the export market remains a concern, particularly in certain African markets, TVS’s geographic expansion plans and investments are expected to partially mitigate these challenges.
“We finally get clarity on the Norton launch plans, which seems impressive considering a new affordable product portfolio, which would also target the growing domestic premium 2W segment. However, the valuation is rich and is factoring in the positives, as we value it at 27x FY26e EPS + the value of subs at Rs 2,261. Maintain ‘Neutral’,” the brokerage added.
Jefferies has issued a buy call on TVS Motors, raising the target price to Rs 3,000 per share, implying an upside of 21 percent from the current levels. Analysts believe TVS will be a key beneficiary of a revival in two-wheeler demand in both domestic and export markets.
Furthermore, the company’s improving franchise is expected to drive continued margin expansion. The management highlighted plans to launch three new products in India during the second half of CY2024, with the launch of Norton motorcycles scheduled to begin by the end of CY2025. Jefferies anticipates the company’s earnings per share to more than double over FY24-27.
Macquarie maintains an outperform call with a target price of Rs 2,783 per share. The brokerage also points out that investments in subsidiaries will be a crucial factor to monitor, particularly from a free cash flow perspective.
TVS Motor shares have rallied 20 per cent in the last three months.
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