Hold TVS Motor Company; target of Rs 2461: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on TVS Motor Company with a target price of Rs 2461 in its research report dated January 29, 2025.

Broker Research

January 30, 2025 / 12:20 IST

Hold

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on TVS Motor Company

TVSL’s Q3FY25 standalone revenue grew by 10.3% YoY while ASP remained flat, coming largely in-line with consensus/PL estimates. Gross profit grew by 19.2% YoY while margin expanded by 211bps YoY, aided by stable input cost, favorable currency realization and pricing action. However, it was offset by higher other expenses and employee cost in proportion to sales leading EBITDA margin expansion to a modest 68bps YoY. Healthy overall performance was suppressed by negative other income due to loss on fair valuation of investments as PAT grew moderately by 4.2%. TVSL delivered record margin performance despite increasing penetration of EV in its overall sales. Going ahead, the company expects to receive PLI benefits from Q4FY25 which shall aid in improving overall profitability further. TVSL outlined new launches in EV and ICE platform across 2W/3W segment and remains confident on outpacing the industry growth in domestic market in the medium-term. Additionally, it remains optimistic on the growth prospects in the international market with LATAM being one of the key markets to drive growth in the premium category of products.

Outlook

We assume its revenue/EBITDA/EPS to grow at a CAGR of 12.4%/17.4%/19.6% over FY24-27E and retain our “HOLD” rating with a TP of Rs2,461 (including Rs 65 for TVS Credit), valuing its core business at a P/E of 33x on its Dec’26E EPS.

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