TVS Motor Company shares drop 2% after Q2 results: Should you buy, sell or hold?

TVS Motor share price

The shares of TVS Motor Company dropped nearly 2 percent in the early trading hours of October 29 after the company released its results for the second quarter of the financial year 2026. The shares of the company were trading at Rs 3,498.50 apiece.

The two wheeler-maker on October 28 reported a standalone net profit of Rs 906 crore for the July-September quarter of the financial year 2026. This marks a 37 percent year-on-year (YoY) rise from the Rs 663 crore net profit reported in the same period last year.

The firm's revenue from operations meanwhile grew 29 percent YoY to Rs 11,905 crore during the quarter under review, as against Rs 9,228 crore during the year-ago period. This was driven by robust sales momentum across segments.

Operating performance also improved sharply, with earnings before interest, tax, depreciation and amortisation (EBITDA) rising 40 percent YoY to Rs 1,509 crore in Q2 FY26 from Rs 1,080 crore in Q2 FY25. This was the highest-ever quarterly operating EBITDA for the Apache motorcycle manufacturer. EBITDA margin expanded by 100 basis points YoY to 12.7 percent.

Morgan Stanley on TVS Motor:

Morgan Stanley kept an 'Overweight' call on the stock, with a target price of Rs 4,022 per share. This implies an upside potential of nearly 13 percent from the stock's previous closing price of Rs 3,562 apiece.

The international brokerage said that the firm's Q2 FY26 performance was in-line with estimates at the EBITDA level, through margin missed expectations. It expects 'scooterisation' and premiumization to be the key drivers of growth in the two-wheeler market.

Jefferies on TVS Motor:

Jeferries kept a 'Buy' call on the stock, with a target price of Rs 4,300 per share. This implies an upside potential of nearly 21 percent from the stock's previous closing price.

The international brokerage said that the firm's Q2 EBITDA and PAT growth were in-line with estimates. While volumes rose 23 percent YoY, EBITDA margin was flattish QoQ at 12.7 percent. It noted that the company’s market share has risen to a 22-year high in domestic two-wheelers and a new high in exports.

Nomura on TVS Motor:

Nomura kept a 'Buy' call on the stock, with a target price of Rs 3,970 apiece. This implies an upside potential of more than 11 percent from the stock's previous closing price.

The brokerage expects outperformance across all sectors. It however noted that the firm’s Q2 margin was slightly below estimate due to lower PLI and forex. EV three-wheeler ramp-up and Norton launch offer potential upside, it added.

Motilal Oswal on TVS Motor:

Motilal Oswal upgraded the stock to 'Buy' from its earlier 'Neutral' rating, with a target price of Rs 4,159 per share. This implies an upside potential of nearly 17 percent from the stock's previous closing price.

TVS Motor Company's Q2 PAT was below the brokerage's estimate, even as the EBITDA miss was just 2 percent. PAT miss was largely driven by higher interest and depreciation expenses, along with a loss on the fair valuation of its investment in TVS Supply Chain, it added.

"Backed by GST rate cuts, management expects 2W demand momentum to sustain in 2H and TVS to continue outperforming going forward… Given its healthy launch pipeline, we have raised our estimates for FY27 by 5.5%. Overall, we factor in TVS to post a revenue/EBITDA/PAT CAGR of 21%/25%/29% over FY25-28E. Its consistent market share gains across key domestic and export segments, along with a gradual improvement in margins, have driven healthy returns over the years. This strong track record is likely to help sustain its premium valuations in the long run," it added.

HDFC Securities on TVS Motor:

HDFC Securities kept an 'Add' call on the stock, raising its target price to Rs 3,522 per share. This implies a downside potential of more than 1 percent from the stock’s previous closing price.

The domestic brokerage said that the firm’s Q2 EBITDA margin was in line with ours and Bloomberg consensus estimate of 12.8 percent. “Going forward, management expects the company to grow faster than the industry in both domestic and international markets, to be aided by the continuing scooterization and premiumization trends. It has guided for the 2W ICE industry to grow 8% in H2, aided by GST rate rationalization. Rare earth magnet shortage continues to impact EV production. Another concern remains on capital allocation, as higher investments continue toward its subsidiaries, which include investments for development of the Norton bike portfolio as well as e-bikes,” it added.

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