Shares of TVS Motor Company rose over 5% today after the auto firm reported a 22 per cent rise in its net profit for the quarter ended December 2022. TVS Motor Company stock climbed 5.16% to Rs 1037.10 against the previous close of Rs 986.20 on BSE. The stock has been gaining for three sessions. TVS Motor Company shares are trading higher than the 5 day, 20 day and 200 day moving averages but lower than 50 day and 100 day moving averages.
The stock has gained 66.35% in a year but fallen 4.81% since the beginning of this year.
Market cap of the firm stood at Rs 49,219 crore on BSE. Total 1.24 lakh shares of the firm changed hands amounting to a turnover of Rs 12.67 crore.
The large cap stock hit a 52-week high of Rs 1,177 on October 19, 2022 and a 52-week low of Rs 513 on March 7, 2022.
The two-wheeler firm logged a 22 per cent rise in standalone net profit to Rs 353 crore. The company reported a 15 per cent increase in revenue to Rs 6,545 crore in Q3 FY23 year-on-year over Q3 FY22. Profit before tax (PBT) climbed 21 per cent to Rs 475 crore for the third quarter of 2022-23 from Rs 391 crore in the third quarter of 2021-22.
The operating EBITDA surged 16 per cent to Rs 659 crore for the third quarter of 2022-23 as against Q3 2021-22 EBITDA of Rs 568 crore. The company’s operating EBITDA margin for the quarter was at 10.1 per cent as against the 10 per cent reported in the third quarter of 2021-22.
The company board at its meeting held on Tuesday declared an interim dividend of Rs 5 per share.
Anand Rathi research team said there is a gradual recovery in rural sales. It has maintained a buy call on the stock after Q3 earnings.
“For TVS Motors, 2W off-take turned tepid in the quarter. Management talked of a gradual recovery in rural markets and, finance penetration having improved, augurs well for a recovery. Semi-conductor shortages have begun normalising and we expect demand for premium motor-cycles and scooters to improve. iQube volumes have substantially improved since its introduction and would further improve as the company plans to penetrate into tier-3 and 4 markets. We maintain a Buy at a revised target price of Rs 1,350 (26x FY25e),” added Anand Rathi.
YES Securities has assigned a buy call to TVS Motor shares with a target price of Rs 1,234, a 25.2% upside against the current market price of Rs 986.
“We believe sustained market share gains in domestic EV 2Ws led by aggressive product pipeline, scope of external investments in to EV vertical and NBFC TVS credit are additional re-rating triggers. We re-iterate TVS as our preferred pick among 2Ws with ADD and revised TP of Rs1,234 (v/s Rs 1,256) and continue to value the firm at 25x Sep-24 EPS plus Rs 55 value to TVS credit and introduce FY25 estimates,” said YES Securities.
ICICI Securities has assigned a buy call to TVS Motor and lowered its target price to Rs 1,251.
"Exports are bottoming out with inventory destocking at the distributor level being largely over. NBFC business delivered Rs 1.35 billion of PBT during the quarter along with PT Indonesia remaining PAT-positive. With the business scaling up, input commodity costs supporting margins, improved chip supply aiding Apache production and EVs moving toward parity with portfolio margin, we expect TVS’ EBITDAM to expand from current 10% levels to 11.5% in FY24E. Maintain BUY with a DCF-based target price of Rs 1,251 (earlier: Rs 1,284), implying 21 times FY25E core EPS," said the brokerage.
Sharekhan has upgraded target price for TVS Motor to Rs 1,303 against the current market price of Rs 986.
“TVS Motor's EBIDTA margin has been sustained at 10% level, given this was consecutively the sixth quarter when TVSM has reported EBIDTA margin at 10% level. Despite macro headwinds, gross margin expanded by 70 bps y-o-y and 60 bps q-o-q to 24.5% in Q3FY2023. Aggressive product launches, foray into new markets, and investments in newer and cleaner technologies with profitable growth would be the company's key growth drivers going forward. ? The stock trades at a P /E multiple of 21.1x and EV/EBITDA multiple of 11.3x its FY2025E estimates. We re-iterate Buy with a PT of Rs 1,303,” said brokerage Sharekhan.
An institutional Research Analyst at HDFC Securities said the performance was stable in adverse macro environment.
"TVS’ Q3 PAT, at Rs 350 crore, was in line with our estimates although the EBITDA margin was lower than our estimate as benefits from better-than-expected ASP were more than offset by the impact of lower volumes and higher EV sales. TVS continued to outperform peers for YTDFY23: (1) it gained 40bps market share in motorcycles to 8.2%. (2) in scooters, it is the biggest gainer and its market share is up 260bps to 23.4%. (3) in exports, while the 2W industry volume is down 12%, TVS exports were down 7%. With supply challenges now largely over, we expect TVS’ outperformance to continue on the back of the ramp-up of its launches, including the new Ronin and Raider. Even in EVs, it seems to be ahead of its listed peers with a strong product pipeline in place for the next 24 months; it has signed up with industry experts and JV partners to emerge as a leading player in EVs. We maintain BUY with an unchanged target price of Rs 1,275 per share, valued at 28 times September 24 EPS."
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