TVS Motor falls 2% but analysts are upbeat on stock

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26 Aug, 2025 12:21

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A day after investors cheered TVS Motor’s results, pushing the stock higher by 5 percent intraday on January 24, the stock has fallen nearly 2 percent intraday on Wednesday. Investors may be cautious on short term pain in sight for the firm. Analysts have appreciated the company’s good performance in a tough business environment and feel that the right product mix will aid its profitability, going forward. They expect business prospects for the company to be slightly under pressure due to factors such as demonetisation, but the situation will improve after two fiscals. This has led them to reiterate their buy stance on the stock. Karvy has reiterated its buy call on the stock and has raised its target price from Rs 425 to Rs 460, valuing the stock at 20X FY19E. The brokerage expects double digit volume growth for the company over the next two years on the back of a strong bounce back in the rural volumes by mid FY18. December quarter’s results were also boosted due to an uptick in realisations. “The management aims to increase volumes as well as expand margins from current level on the back of success of new products. New mopeds, Jupiter and Apache RTR has created strong brand for the company and these products are key volume driver. We believe that its EBIDTA margins would expand from current 7% to 9% over FY18-19,” it said in its report. The brokerage has lowered its projections for the next two fiscals due to the near term slowdown and demonetisation, but expects the numbers to be better going forward. “Due to ongoing traction on volume across the segments, steady margin expansion and potential from upcoming BMW products, we reiterate our buy on TVS. We see TVS as better place in domestic two wheeler industry with decent current product portfolio,” the report stated.Goldman Sachs has reiterated its buy call on the stock with a target price of Rs 450 per share. It feels that the company’s focus on scaling up brands along with the ramp up bodes well for its profitability. The brokerage has forecast an EPS CAGR of 47 percent over FY16-19.Macquarie has raised TVS Motor’s FY17-19 earnings by 1-3 percent, following the Q3 earnings. The brokerage also increased the target price to Rs 400 apiece from Rs 385 per share. It highlighted that the company has posted a good performance in a tough quarter.  The two-wheeler maker’s profit in third quarter grew by 10.4 percent year-on-year to Rs 132.67 crore, driven by other income and lower tax cost. Revenue during the quarter increased 2.8 percent to Rs 3,239.55 crore compared with Rs 3,151.12 crore in year-ago period, driven by sales growth. Realisations per unit during the quarter rose 0.72 percent to Rs 41,551 from Rs 41,250 in year-ago period. In the past one month, the stock has seen an upward movement. The scrip has risen over 7.5 percent in the past one month. At 14:09 hrs TVS Motor Company was quoting at Rs 394.30, down Rs 6.90, or 1.72 percent. It has touched an intraday high of Rs 404.45 and an intraday low of Rs 393.50.