TVS Motor Company’s revenue from operations in the quarter under review grew 24% YoY to Rs 8,169 crore as against Rs 6,605 crore registered in the quarter ended March 2023 while Overall, two-wheeler and three-wheeler sales, including exports, grew by 22% to 10.63 lakh units in the quarter ended March 2024.
Here’s how brokerages view the stock post Q4 results:
Jefferries
The stock is scaling to new highs and the growth momentum seems to continue as India’s 2-wheeler industry is poised for strong growth while exports are also recovering, said Jefferies. The company’s margins are improving and the EPS has more than trebled in the last 3 years and is expected to more than double in the next 3 years.
Jefferies has a ‘buy’ rating for the stock with a target price of Rs 2,525.
Goldman Sachs
Goldman foresees a pickup in new launches for TVS Motors. FY25 may be a good year for the company where PLI incentives might be an advantage coupled with stepping up in international markets.
The brokerage has a ‘neutral’ view on the stock, with a target of Rs 2,250.
Nuvama
TVSL has been gaining domestic share, and Nuvama expects it to edge up from 17.1% in FY24 to 17.4% by FY26E led by an increasing share of executive/premium motorcycles and EVs. On the whole, the brokerage reckons revenue/EPS CAGR to be 13%/24% over FY24–26E. Meanwhile, annual FCF of Rs 2,700 crore shall help pare net debt/equity from 0.2x in FY24 to 0.1x in FY26E.
Nuvama kept an unchanged target price for the stock at Rs 2,400 while retaining a ‘buy’ rating.
JM Financial
“In 4QFY24, TVS Motor (TVSL) reported an EBITDA margin of 11.3% (+100bps YoY, +10bps QoQ), in-line with JMFe led by cost reduction efforts. Domestic 2W demand, so far, is led by the urban market and there are early signs of revival in the rural segment. Demand in the international markets has also started to recover,” stated a report by JM Financial.
The brokerage maintained ‘Buy’ with a March 2025 target price of Rs 2,100.
Motilal Oswal
The brokerage firm states that volume growth is likely to be driven by a recovery in the domestic 2W market, healthy demand for its products (Raider, 125CC scooters and iQube) and new product launches. Motilal expects TVS to continue to work on improving its profitability and factor in 90 bps expansion in EBITDA margin over FY24-26E.
Motilal Oswal has a ‘neutral’ rating with a target price of Rs 1,930 on the stock.
Kotak Institutional Equities
With the aggressive pricing strategy followed by competitors in EVs, the company’s domestic ICE scooter demand and profitability of the overall ICE and EV scooter segments will come under pressure in the coming years, stated a report by Kotak.
KIE retained its ‘sell’ view backed by expensive valuations with a target of Rs 1,400.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)