Buy TVS Motor; target of Rs 1459: HDFC Securities

HDFC Securities' research report on TVS Motor

TVS Motors’ Q1 PAT came in ahead of estimates due to higher other income although its margins came in line with our estimate at 10.6%. This performance is commendable, given that it includes the 30bps impact of price protection for eligible iQube customers and the ramp-up of iQube volumes. While TVS continued to outperform its peers in Q1 and gained 450bps market share in motorcycles to a record high level of 10.8%, it has maintained its share in scooters at 25%. With supply challenges now largely over, we expect the company’s outperformance to continue on the back of healthy demand for its best-selling products like Raider, Apache, Ronin, etc. Even in 2W EVs, TVS is putting the right building blocks in place in order to emerge as a leading player in EVs, which include: (1) new launches across segments; (2) ramp up of dealer network; and (3) signing up with industry experts, JV partners and e-commerce players.

Outlook

We maintain BUY with a revised TP of INR 1,459/sh (earlier INR 1342), as we roll forward to June’25 EPS (target multiple unchanged at 28x).