TVS Motor share price touches 52-week high as Q2 results meet street estimates; here's what brokerages say

TVS Motor share price touched 52-week high on Tuesday's trading session as the company's Q2 results were overall positive and in line with the street's estimates. TVS Motor shares opened at a intraday high of ₹1,640 on BSE.  TVS Motor share price started on a strong positive note, making fresh new high however from there, analysts said that they could not see follow up buying and prices have gradually declined lower.

At 13:36 IST, TVS Motor shares were trading at ₹1,599.15, down 0.66% on BSE.

According to Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One, the trend for TVS Motor shares remains positive but some tentativness is seen at higher levels with indicators in over bought. Ideally one should have buy on dip and sell on rally with 1,550 as support and 1,650 as resistance. 

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On Monday, TVS Motor Company for the quarter ended September, posted a 32% rise in its net profit of ₹537 crore as against ₹408 crore during the same period last year.  Apart from this, the firm's operating revenue increased by 13% at ₹8,145 crore in the September quarter of FY 2023-24, compared to ₹7,219 crore in Q2 of last year, it said in a stock regulatory filing.

The company’s operating EBITDA grew by 22% at ₹900 crore for the second quarter of FY2023-24 as against EBITDA of ₹737 crore in Q2 FY 2022-23. It added the EBITDA margin for the quarter stood at 11.0% as against the EBITDA margin of 10.2%, reported in the second quarter of 2022-23.

Also Read: TVS Motor Q2 Results: Net profit up 32% at ₹537 crore, revenue rises 13%

As TVS Motor Q2 results were in line with the street's forecast, brokers have maintained a "buy" view on the stock. Let's see what brokerages have to say about the Q2 results:

JM Financial 

The brokerage said in its report that TVS Motor's EBITDA margin for the second quarter of FY24 was 11%, which was roughly in line with its estimates due to cost-cutting measures, a favourable mix, and higher operating leverage. Improved consumer sentiments and the anticipated rural recovery drive domestic 2W demand. 

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In the global markets, issues with affordability and exchange rates have essentially peaked. Regarding EVs, TVS intends to grow its global presence and introduce innovative products in order to accelerate the EV business going forward.

“Overall, we expect TVSL’s outperformance to continue on the volume front (led by premiumization and EV product launches), while steady/softening RM prices, operating leverage and astute cost management would help on the margin front. We estimate revenue/ EPS CAGR of 15%/28% over FY23-26E. We maintain BUY with a Mar’25 target price of ₹1,650. Prolonged slowdown in international market remains a key risk,” the brokerage explained in its report.

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Nuvama Institutional Equities 

According to the brokerage's report, TVS Motor reported revenue and EBITDA increase of 13/22% YoY to ₹81/9 billion in Q2FY24, which was in line with estimates. Its domestic market share has increased.The brokerage firm anticipates a further rise, from 16% in FY23 to 18% in FY26E, driven mostly by higher shares of EVs and executive/premium motorcycles.

“We increase FY24/25E EPS by 8/7%, factoring in better net pricing. Following the revision, revenue/EPS CAGRs estimated at 13/26% over FY23–26E. Retain ‘BUY’ with a Sep-24 target price of ₹1,840. We upgrade the multiple on strong growth prospects, owing to early stage of 2W upcycle, market share gains and aggressive EV focus,” the brokerage said. 

Axis Securities 

"TVS Motor Ltd Q2FY24 numbers were largely in line with our Revenue and EBITDA estimates with a slight Beat on PAT. Revenue (inline) grew by ~13% YoY/QoQ, both led by higher sales volumes (up ~5%/13% YoY/QoQ) and higher ASP due to price hikes during the year and a richer product mix. EBITDA (inline) grew by ~22%/18% YoY/QoQ, mainly led by gross margin expansion and better product sales mix, partly offset by higher marketing expenses.

We continue to like TVSL considering its strong focus on the EV product pipeline ahead of incumbent 2W OEMs, product premiumisation in the ICE category, and growth in export markets. We reiterate our BUY rating on the stock with a revised target price at ₹2,100/share," the brokerage said.

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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.