JM Financial maintains Buy on TVS Motor, raises target price to Rs 3,150

JM Financial has maintained its Buy call on TVS Motor Company with a revised target price of Rs 3,150 (earlier Rs 2,650). The current market price of TVS Motor Company is Rs 2683.6. The time period given by the analyst is a year when TVS Motor Company price can reach a defined target. TVS Motor, incorporated in 1992, is a Large Cap company with a market cap of Rs 127313.84 crore, operating in the Auto sector.

TVS Motor's key products/revenue segments include Automobile - 2 & 3 Wheelers, Other Operating Revenue, Sale of services for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 11473.84 crore, up 2.45% from last quarter Total Income of Rs 11199.74 crore and up 14.75 % from last year same quarter Total Income of Rs 9998.94 crore. The company has reported net profit after tax of Rs 713.57 crore in latest quarter.

The company's top management includes Prof.Ralf Dieter Speth, Mr.B Sriram, Mr.Hemant Krishan Singh, Mr.Vijay Sankar, Mr.Kuok Meng Xiong, Dr.Deepali Pant Joshi, Mr.Shailesh Haribhakti, Mr.C R Dua, Mr.K N Radhakrishnan, Mr.Sudarshan Venu, Mr.Venu Srinivasan, Dr.Lakshmi Venu. Company has Sundaram & Srinivasan as its auditors. As on 31-03-2025, the company has a total of 48 crore shares outstanding.

Investment Rationale
In 4QFY25, TVS Motor reported EBITDA margin of 14%, 150bps above JM Financial estimates. 260bps YoY margin expansion was primarily led by inclusion of full-year PLI benefits and cost reduction initiatives. Excluding PLI benefits, EBITDA margin for 4Q stood at 12.5%. For FY26, domestic 2W industry growth is expected to be similar to FY25, supported by improved consumer sentiments and pickup in rural demand. Demand in the international market is also improving gradually. With respect to EVs, TVSL plans to ramp-up EV business by a) introducing new products (both E2W and E3W) in the near-to-medium term and b) expanding dealer network. Overall, JM Financial expects TVSL?s outperformance to continue on the volume front led by premiumisation and EV product launches. Richer mix, higher operating leverage, astute cost management is expected to drive margin performance. The brokerage estimates revenue / EPS CAGR of 18% / 32% over FY25-27E. They maintain BUY with a Mar?27 target price of Rs 3,150 (32x Mar?27E EPS). Industry slowdown remains a key risk.

Promoter/FII Holdings
Promoters held 50.27 per cent stake in the company as of 31-Mar-2025, while FIIs owned 21.48 per cent, DIIs 19.56 per cent.