Anand Rathi's research report on TVS Motor
Lagging our estimated 13.4%, TVS Motor’s Q4 adj. EBITDA margin (excl. PLI benefits pertaining to previous quarters) came at 12.5% due to less-than-expected PLI benefits. Despite this, our positive stance on the stock is backed by 1) expectations of cyclical upturns in 2Ws (domestic/exports); 2) market-share gains (domestic/overseas); 3) the company’s relentless EV strategy and 4) margin expansion from rising economies of scale and cost-cutting steps. We expect 14%/19%/22% revenue/EBITDA/PAT growth over FY26-27.
Outlook
We, thus, retain our Buy rating on the stock, with a slightly higher TP of Rs 3,100 (earlier Rs3,050), 35x FY27e EPS (35x FY26e EPS), and value the investment in TVS Credit Services at Rs100/sh.
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