Accumulate TVS Motor Company; target of Rs 1650: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on TVS Motor Company with a target price of Rs 1650 in its research report dated October 30, 2023.

Broker Research

November 02, 2023 / 17:06 IST

Accumulate

26 Aug, 2025 12:21

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Todays L/H

Prabhudas Lilladher's research report on TVS Motor Company

We change our FY25/FY26E EPS estimates by 1%/6% to incorporate improvement in margins, as impact from higher EV mix will get offset by PLI and scale benefits. TVS Motor’s (TVSL) 2QFY24 performance was largely inline with inventorisation and cost control helping offset impact from poor mix (EV volumes +49% QoQ). The company sharply ramped-up its EV volumes besides gained market share and now plans to launch multiple products in domestic market and also export EVs globally. Urban demand was strong for the industry which should continue, while rural demand is expected to recover. EBITDA margins benefited from inventorisation and expanded c50bp QoQ to 11%, despite higher share of EVs. We expect margins to remain below current levels in 2HFY24E as inventorisation benefit reverses and company continues investing in advertising.

Outlook

We believe TVS is well placed to outperform the industry given (1) good tractions for new product launches in ICE & EV segments (2) higher focus on exports & premiumisation and (3) margin improvement helped by cost control, (4) operating leverage, (5) benign input prices and (6) PLI benefits to likely offset impact from higher EV mix. Retain ‘ACCUMULATE’ with TP of Rs1,650 (earlier TP at Rs. 1,560) at 27x Sep-25E EPS incl. Rs66 for TVS credit (earlier Rs. 35).

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