TVS Motor: Choice raises target price to Rs 4,900 and rates the stock Buy

what happened

According to TradingView, citing a report from Choice Institutional Equities, TVS Motor Company's revenue rose 44% year on year, EBITDA rose 47% and profit after tax rose 52%. Volumes climbed 27% to 1.9 million units, helped by domestic demand and growing interest in electric vehicles.

Scooters accounted for about 41% of sales, counting both petrol and electric models. The EBITDA margin widened 32 basis points to 13.0%, despite a 1.9% sequential rise in material costs that was partly offset by a price increase of about 1.6%. Domestic electric two-wheeler sales grew 129%, against 84% growth for the segment overall.

The company plans to lift EV capacity from 60,000–65,000 units a month to about 80,000. The analysts raised their FY27E and FY28E EPS estimates by 10.3% and 4.3%, and lifted their target from Rs 4,250 to Rs 4,900, based on a 34x P/E multiple. They also assigned Rs 100 per share to TVS Credit. The rating moved from Add to Buy.

why it matters

For the market, the key points are the capacity plans and management's expectation of single-digit growth in the two-wheeler industry in the second half of FY27, while the high base and commodity costs remain the main factors to monitor.

tags

instruments