TVS Motor Shares Hit 52-Week High As Profit Surges 32% On Higher Sales; Should You Buy?

Shares of TVS Motor Company Ltd were trading in the green around 9:30 am and jumped 1.5% to hit their 52-week high of Rs 1,634 on the NSE in Tuesday’s trade after a better-than-estimated September quarter net profit. Later in the day they slipped into the red and slipped 3%.

The TVS Motor stock opened at Rs 1,634 and went on to hit an intraday low of Rs 1,585.45. The scrip has risen 38% in the last six months. On a year-to-date basis, the stock has rallied 50%, compared with an over 27% climb in the Nifty Auto index.

The company’s profit rose 31.7% to Rs 527 crore in the three months to September 30 from a year earlier. Analysts on average estimated a profit of Rs 525 crore as per LSEG data.

TVS Motor’s scooter and motorcycle sales rose 10% and 3%, respectively, during the quarter.

Should You Buy TVS Motor Shares?

Following TVS Motor Company’s better-than-estimated September quarter net profit, Jefferies raised its price target on the two-wheeler stock.

The brokerage remains optimistic about the company’s growth prospects in light of improving 2W demand in the country.

Domestic brokerage firm Nuvama maintained its ‘Buy’ rating on TVS Motor with a revised target price of Rs 1,840 from Rs 1,510 earlier. Nuvama said that TVS has been gaining domestic share. Market share has grown from 14% in FY18 to 16% in FY23.

The brokerage expects a further increase from 16% in FY23 to 18% in FY26, led by increased share in executive or premium bikes and electric vehicles.

“Multiple launches (Jupiter, Zest, Ntorq, iQube, Radeon and Raider) over the years have enabled volumes, market share gains. We estimate outperformance in overseas markets with new products, better penetration, and FY23-26E domestic/export 2W volume CAGR at 11%/8%,” it said.

Himanshu Singh – Research Analyst at Prabhudas Lilladher believes TVS is well placed to outperform the industry given good tractions for new product launches in ICE and EV segments; higher focus on exports and premiumisation and margin improvement helped by cost control; operating leverage; benign input prices and PLI benefits to likely offset impact from higher EV mix.

The brokerage has retained ‘Accumulate’ with a revised stock target of Rs 1,650 from earlier Rs 1,560.