Inventory market at the moment: TVS Motor Firm, one of many nation’s main two-wheeler and three-wheeler producers, noticed its shares spike for the second consecutive buying and selling session on Wednesday, January 29, gaining one other 9% and reaching a 3-week excessive of ₹2,539 apiece. The inventory rose as brokerages retained their constructive stance following the discharge of the corporate’s December quarter efficiency.
The corporate, throughout market hours on Tuesday, reported a third-quarter revenue that missed estimates, as its two-wheeler gross sales grew on the slowest tempo in additional than a yr. Nonetheless, enhancements in working numbers prompted the inventory to finish the session 5% larger.
TVS Motor: Brokerages retain bullish stance
Following the corporate’s Q3 efficiency, world brokerage agency Macquarie maintained its ‘Outperform’ score on the inventory with a goal worth of ₹2,857 apiece. The brokerage famous that 3Q FY25 noticed a modest EBITDA beat, pushed by higher gross margins. Macquarie believes that market-share features and margin growth will drive industry-leading earnings development and inventory efficiency.
JP Morgan retained its ‘Obese’ score on the inventory with a goal worth of ₹3,130 apiece. Home brokerage agency Nuvama Institutional Equities retained its ‘Purchase’ name on the inventory with an unchanged goal worth of ₹3,100 apiece.
“TVS Motor has been gaining market share in each home and abroad markets, and we anticipate its home share to rise from 17% in FY24 to 18% by FY27E. Moreover, we forecast margin growth in subsequent quarters because of the accounting of PLI incentives,” stated the brokerage.
Its home 2W market share grew from 15% in FY19 to 17% in FY24, with a number of launches (Jupiter, Zest, Ntorq, iQube and Raider) driving market share features over time. The brokerage forecasts FY27E share at 18% on the again of TVSL’s sturdy presence in ICE government/premium bikes and EVs.
Motilal Oswal, however, maintained its “Impartial” score on the inventory with a goal worth of ₹2,570 apiece. The brokerage acknowledged that the lately launched Jupiter 110 has been very nicely acquired by prospects and is probably going to assist TVS Motor achieve a share within the scooter market within the coming quarters.
Nonetheless, it famous that the corporate has underperformed the {industry} within the motorbike phase in FY25 YTD, significantly within the 125cc phase, which has been a key development driver in recent times. Moreover, whereas there’s a restoration within the export market, its full restoration has but to be realised, the brokerage noticed.
TVS Motor Q3 earnings snapshot
The corporate reported a 4.2% year-on-year (YoY) improve in its standalone web revenue for the December quarter, reaching ₹618 crore in comparison with ₹593 crore in the identical interval final yr. The income from operations for Q3FY25 reached ₹9,097 crore, marking a ten% improve from ₹8,245 crore in the identical quarter of the earlier monetary yr.
The corporate’s working EBITDA grew by 17%, reaching ₹1,081 crore for the third quarter of FY25, in comparison with an EBITDA of ₹924 crore in Q3 FY24. The working EBITDA margin for the quarter was the best at 11.9%, in comparison with 11.2% in Q3 FY24.
The corporate recorded gross sales of 12.1 lakh items, registering development of 10% for the quarter ended December 2024 as in opposition to 11.0 lakh items reported within the quarter ended December 2023.
Disclaimer: The views and suggestions given on this article are these of particular person analysts. These don’t characterize the views of Mint. We advise buyers to examine with licensed consultants earlier than taking any funding selections.
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