Hold TVS Motor Company; target of Rs 2660: Prabhudas Lilladher

Hold

Prabhudas Lilladher's research report on TVS Motor Company

TVS Motor Company reported a healthy set of numbers for Q4FY25, delivering strong margins and profitability expansion, aided by the recognition of PLI. Standalone revenue grew by 16.9% YoY, supported by a 2.1% increase in ASP. Excluding PLI benefits of the previous quarters, revenue increased by 14.4% YoY while realization remained flat. Gross profit increased by 29.6% YoY, with a 295bps expansion in gross margins while EBITDA grew by 43.9% YoY, with EBITDA margins expanding by 262bps YoY. Consequently, this lifted its PAT by 75.5% over Q4FY24.

Outlook

Factoring this, we assume its revenue/EBITDA/EPS to grow at a CAGR of 10%/11%/12.4% over FY25-27E and retain our “HOLD” rating with a TP of Rs 2,660 (including Rs 67 for TVS Credit), valuing its core business at a P/E of 36x on its Mar’27E EPS.

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TVS Motor Company - 29042025 - prabhu