Hold TVS Motors; target of Rs 530: Sharekhan

Sharekhan's research report on TVS Motors

Q4 FY19 results missed estimates as margins dropped due to operating deleverage, increased commodity prices and discounting. Margin contraction trend is expected to sustain due to higher regulatory costs and increased competitive intensity amid subdued industry demand. At CMP the stock is at the higher end of its long term historical multiples, leaving scope of limited upside from the current levels.

Outlook

We downgrade our recommendation on the stock of TVS Motor Company (TVSM) to “Hold” from “Buy” with a revised PT of Rs 530.