Hold TVS Motor Company; target of Rs 2628 Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on TVS Motor Company with a target price of Rs 2628 in its research report dated October 24, 2024.

Broker Research

October 24, 2024 / 11:04 IST

Hold

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on TVS Motor Company

TVSL’s Q2FY25 standalone revenue grew by up by 13.3% YoY, coming in 3.8%/2% lower than PLe/BBGe. Despite healthy volume growth and mix improvement in motorcycle, ASP declined by 1% YoY/2.5% QoQ, owing to inferior mix in the scooter’s portfolio. EBITDA grew by 20% YoY with a margin expansion of 70bps YoY to 11.7%, a 7 consecutive quarter of margin improvement. PAT increased by 23.5%, however; it was 4.7% below consensus estimates. TVSL outlined new launches for the EV portfolio to drive the overall scale of the business. The company foresees healthy growth outlook in the exports business with LATAM being one of the key market of its focus while steady revival in African volume shall further aid in international volume expansion. TVSL expects industry to grow by 7-8% YoY in Q3FY25 and aims itself to outperform the industry growth rate.

Outlook

We cut our revenue/EPS estimates by ~2- 4% to account for less favorable scooters mix. Factoring this, we estimate its revenue/EBITDA/EPS to growth at a CAGR of 13.5%/17.5%/20.4% over FY24- 27E and retain our “HOLD” rating and reduce our TP from Rs 2,784 to Rs2,628 (including Rs 78 for TVS Credit), valuing it at a P/E of 36x on its Sept’26E EPS.

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