Hold TVS Motor Company; target of Rs 1955: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on TVS Motor Company with a target price of Rs 1955 in its research report dated January 25, 2024.

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January 29, 2024 / 18:32 IST

hold

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on TVS Motor Company

TVS Motor’s (TVSL) 3QFY24 revenue was largely in-line vs our and consensus estimates, while EBITDA margin beat PLe (it was in-line vs consensus). Higher export realization, favorable input cost and better product mix helped on the margin side. TVSL plans to ramp-up its EV volumes with network expansion (doubling in a quarter) and product expansion in FY25 in domestic market and also export EVs globally. Urban demand was strong for the industry which TVSL believes should continue, while rural demand has shown initial signs of pick-up. On exports side, recovery has not been as expected, however, worst seems to be behind us. We believe TVS is well placed to outperform the industry given (1) good tractions for new product launches in ICE & EV segments and (2) higher focus on exports, premiumisation and margin improvement helped by cost control, operating leverage, benign input prices and PLI benefits (likely to offset impact from higher EV mix).

Outlook

We slightly tweak our FY25/FY26E EPS estimates to incorporate 3Q beat on margins and management commentary. Retain ‘HOLD’ with TP of Rs1,955 (earlier TP at Rs. 1,950) at 30x Dec-25E EPS incl. Rs68 for TVS credit, as we see all positives to be priced in at current valuations.

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