TVS Motor Company Ltd. share price target

Arriving at a revised TP of Rs 3,810 (Earlier: Rs 3,085), implying an upside of 11% from the CMP. We hence maintain our BUY rating on the stock.

The demand environment remains positive, driven by good monsoons, benign interest rates, tax reliefs, and the festive season in addition to strong exports. FY26 capex is expected to be Rs. 1,600-1,700 cr. The company also plans to make strategic investments of Rs. 2,000 cr in FY26. Management indicated commodity cost pressures of around 0.5% in Q2, which they intend to...

We upgrade from HOLD to BUY rating on the stock.

Lagging our estimated 13.4%, TVS Motor’s Q4 adj. EBITDA margin (excl. PLI benefits pertaining to previous quarters) came at 12.5% due to less-than-expected PLI benefits.

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...

Q4 revenue grew in double digits at 17%/5% YoY/QoQ) to Rs 95.5bn, backed by volume growth of 16% YoY (flat QoQ) to ~1.22mn units

We recommend our HOLD rating on the stock.

TVSL reported a strong Q4 with ~4.6% QoQ ASP growth and reported EBITDA margin of 14%, aided by recognition of PLI benefit for the full year; margins excl 9M PLI stood at 12.5% vs 11.9% in Q3 (2.3% ASP growth at ~Rs76,800 without considering 9M PLI).

TVS Motor (TVSL) delivered an in-line operating performance, excluding the PLI benefit. Adjusted PAT grew 42% YoY to INR6.9b, broadly in line with our estimate of INR6.75b.

TVS Motor Company (TVSL) continued to move up the profitability curve in Q4FY25. Excluding PLI benefit of previous quarters, Q4 EBITDA margin stood at 12.5%, up ~120bps/60bps. TVSL expects growth momentum to continue; it expects to outperform industry in both ICE and EV segments in FY26.

The company is generating stable return ratios in line with return in sales.

Company Update

We maintain our BUY rating on the stock.

TVSL reported a healthy operational performance (revenue up 10% YoY; margins up by 20bps QoQ to 11.9%, a fresh high). TVSL expects the robust momentum in the domestic 2W industry to continue, led by rural green shoots, with exports also seeing sustained recovery;

In a recent interview in Davos with CNBC TV18 (refer to link), Sudarshan Venu, MD, TVS Motor highlighted that: i) The 2W industry demand is recovering strongly in the initial 3 weeks of Jan25, with resumption in government capex which sets a positive tone for CY25/FY26

TVS Motor Company (TVSL) continued to move up the profitability curve. The company delivered yet another quarter of record margin at 11.7% (vs. consensus 11.8%).