TVS Motor Q3 Results Review - Robust Quarter; New Launches To Boost Growth: Axis Securities

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Axis Securities Report.TVS Motors Ltd. Q3 FY24 numbers were largely in line with our revenue and Ebitda estimates with a beat on profit after tax. Revenue (inline) grew by ~26% YoY (1% QoQ), mainly led by higher sales volumes (up ~25%/2% YoY/QoQ). Ebitda (inline) grew by ~40% YoY (3% QoQ), mainly led by gross margin expansion on account of commodity softening and price hikes taken during the year partly offset by higher marketing expenses towards new product launches. Gross margin’s improved by 183 basis points YoY (32 bps QoQ) basis to ~26.3%. Profit after tax grew by robust ~68% YoY (11% QoQ) and 9.7% beat largely on account of higher other income (Rs 73 crore). .Outlook: We believe TVS Motor to be ahead in introducing a range of electric vehicle products ahead of other two-wheeler original equipment manufacturers. Being well-placed among listed players, we expect the company’s revenue/Ebitda/profit after tax to grow by ~17%/21%/24% CAGR over FY24E-26E. We like TVS Motor because of its engineering and research and development capabilities, strong domestic retail network and increasing sales volumes from premium offerings in developed countries (Norton business to be developed in a few years)..Valuation and recommendation: Based on the above strong fundamental outlook, we expect the company to deliver a strong return on equity ranging between 27%-30% over the next few years. With the competitive intensity increasing over the next few quarters in the EV and mid-weight motorcycle category we value it at a sustainable premium price/earning multiple of 32 times on FY26 core EPS (earlier 34 times on Dec-25 EPS) and other investments at one time price/book value and TVS Credit Services at two times price/book value on FY23, thereby arriving at a target price of Rs 2,350 (unchanged). The target price implies an upside of 17% from the current market price..Key risks to our estimates and target priceSlower than expected rural demand, due to mismatch between rise in per capita income versus price hikes taken on account of regulatory norms like OBD, BS VI phase II to impact two-wheeler demand specifically, the entry-level segment. Further delay in volume pickup of Export markets (mainly African, Latin America and Asian markets) may hinder volume recovery prospectus and negatively impact bottom line margins..Click on the attachment to read the full report:.TVS Motor Q3 Results Review - Mixed Bag Performance: Yes Securities.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

TVS Motor Q3 Results Review - Robust Quarter; New Launches To Boost Growth: Axis Securities

The company expects to grow faster than the industry, led by premium two-wheeler models (Raider, Apache, Ronin, Jupiter125) along with new product launches in the EV portfolio over the next two years.

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TVS Motor Q3 Results Review - Robust Quarter; New Launches To Boost Growth: Axis Securities

The company expects to grow faster than the industry, led by premium two-wheeler models (Raider, Apache, Ronin, Jupiter125) along with new product launches in the EV portfolio over the next two years.

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