Hold TVS Motor; target of Rs 399: Arihant Capital

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26 Aug, 2025 12:21

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Arihant Capital's research report on TVS Motor

TVS Motor Co (TVSL) reported in-line operating performance in Q1FY20 as net sales stood at Rs 44.7bn (+7.6% YoY / +1.9% QoQ) led by higher realizations which stood at Rs 48k (+8.2% YoY / +0.2% QoQ). Gross margins at 24.9% (+104bps YoY/ +149bps QoQ) was due to higher export mix and softening of commodity prices. The EBITDA margin stood at 8% (+58bps YoY/ +93bps QoQ) vs our est of 7.2% on account of efforts towards cost reduction through value engineering. On the concall, management highlighted that demand will remain weak in Q2 FY20. However, the demand is expected to improve in H2FY20.

Outlook

At CMP of Rs 380, the stock trades at 20x FY21E. Thus, we revise our rating to HOLD on the stock and value it at 21x FY21e (22x earlier) for a target price of Rs399 (Rs 431 earlier) for an upside of 5%.

For all recommendations report, click here

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