Motilal Oswal's research report on TVS Motor Company
TVS Motor (TVSL) posted an in-line result, with margin at 11.7% (est. 11.1%) despite an adverse mix. On the back of better monsoons and higher reservoir levels, domestic 2W rural demand has been ahead of urban demand in 1HFY25, which is anticipated to sustain in FY25. However, the export outlook continues to be uncertain due to weak demand in Africa. Management expects the 2W industry to post 7-8% YoY growth in 3QFY25, which is lower than earlier envisaged. At ~48x/38x FY25E/FY26E EPS, we believe most of the positives are in the price. We maintain our FY25E/26E EPS estimates. Reiterate Neutral with a TP of ~INR2,610 (based on ~32x Sep’26E EPS and INR210/sh for the NBFC).
Outlook
Given these factors, we believe TVSL at 48x/38x FY25E/FY26E EPS appears fairly valued. Reiterate Neutral with a TP of ~INR2,610 (premised on ~32x Sep’26E EPS + INR210/share for NBFC).
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