Sharekhan is bullish on TVS Motors has recommended buy rating on the stock with a target price of Rs 470 in its research report dated July 29, 2020.
Sharekhan's research repor on TVS Motors
TVS Motors (TVSM) Q1FY21 operating results were lower than estimates as negative operating leverage due to steep fall in volumes impacted the margins. However, tax credit during the quarter led to lower than expected loss during the quarter. On the demand front TVSM is expecting strong recovery in both domestic (due to strong rural sentiments) and exports (due to opening up of economies and steady oil prices). TVS expects to reach Pre-COVID 19 volumes by September 2020. Cost control initiatives coupled with pick up in volumes would drive margin improvement for TVSM. We expect TVSM to deliver strong 17% earnings CAGR over FY20-22 period. Valuations at 20.1x core FY22 earnings are lower than long term historical average of 23x.
Hence, we retain Buy rating on the stock with PT of Rs 470.
For all recommendations report, click here
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