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Business News/ Markets / Stock Markets/  TVS Motor share price climbs nearly 6% after Q4 result; should you buy? Here's what experts say
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TVS Motor share price climbs nearly 6% after Q4 result; should you buy? Here's what experts say

TVS Motor share price has seen strong gains in the last year, rising as much as 63 per cent at the May 8 close. The BSE Auto index has gained 64 per cent in the same period.

TVS Motor share price has gained over 63 per cent over the last year. (iStock)Premium
TVS Motor share price has gained over 63 per cent over the last year. (iStock)

TVS Motor share price: Boosted by healthy Q4 results, shares of TVS Motor Company rose almost 6 per cent in early trade on BSE on Thursday, May 9, defying weak market sentiment. TVS Motor share price opened at 2024 against its previous close of 2,006.15 and soon rose about 5.7 per cent to the level of 2,121.30. Around 10:05 am, TVS Motor share price traded 5.46 per cent higher at 2,115.65 apiece on BSE. Equity benchmark Sensex was 0.40 per cent down at 73,174 at that time.

TVS Motor Q4 result

After market hours on Wednesday, May 8, TVS Motor reported an 18 per cent year-on-year (YoY) increase in its standalone net profit to 485 crore from 410 crore reported by the company in the year-ago period.

Revenue from operations rose 24 per cent YoY to 8,169 crore against 6,605 crore in the corresponding quarter of the last financial year.

Also Read: TVS Motor Q4 results: Net profit up 18% to 485 crore, 4 key highlights from earnings

TVS Motor share price trend

TVS Motor share price has seen strong gains in the last year, rising as much as 63 per cent till May 8 close, almost in sync with the sectoral index BSE Auto, which has gained 64 per cent. Equity benchmark Sensex has risen 19 per cent in the last one year.

TVS Motor share price hit its 52-week high of 2,313.90 on the BSE on March 7 this year. It witnessed some profit booking in April and fell over 4 per cent for the month. In May so far, the stock gas gained about a per cent.

The stock's 52-week low level on the BSE is 1,214.50 which it hit on May 18 last year.

Also Read: Defence stocks to buy: HAL, BEL shares gain over 2% as Nomura initiates coverage, sees up to 30% upside

Should you buy the stock after the Q4 result?

Several brokerage firms are upbeat about the company's growth prospects as they expect TVS Motor's outperformance to continue on the volume front. Additionally, cost management is expected to boost the margins.

"We expect TVS Motor's outperformance to continue on the volume front, led by premiumisation and EV product launches, while higher operating leverage and astute cost management would help on the margin front," said brokerage firm JM Financial which maintained a buy call on the stock with an unchanged target price of 2,100.

JM Financial estimates TVS Motor's revenue and EPS (earnings per share) CAGR of 14 per cent and 24 per cent, respectively, over FY24-26E.

Also Read: Hero Motocorp Q4 results: Net profit up 18% to 1,016 crore; 40 per share dividend declared, stock jumps 2.5%

Brokerage firm Emkay Global Financial Services also maintained a buy call on the stock with an unchanged target price of 2,250.

The brokerage firm, however, has trimmed its FY25E and FY26E EPS estimates by nearly 3.7 per cent and 3.4 per cent, respectively, due to a miss on margins in Q4FY24.

Emkay pointed out that TVS Motor's management is confident of outperforming the industry in domestic markets as well as exports, aided by new launches across the ICE and EV verticals.

Rich valuation caps upside potential

The sharp gains in the stock over the last year leave limited scope for the upside in the stock price.

Brokerage firm Kotak Institutional Equities has retained a sell call on the stock, revising the fair value to 1,400 from 1,180 earlier, citing the expensive valuation of the stock at 39 times FY2025E EPS.

Kotak has increased its FY2025-26 EPS estimates by 2-4 per cent on account of higher volume assumptions, partly offset by lower other income assumptions.

Kotak pointed out that TVS Motor's market share in the EV segment has declined from the peak of 22 per cent due to an increase in competitive intensity.

"We believe that the pick-up in the adoption of EVs and aggressive pricing strategies by competitors will impact the demand for ICE scooters and weigh on the profitability of both EV and ICE scooter segments. Losses from the subsidiaries (ex-TVS Credit) increased by 30 per cent YoY in FY24, which needs to be monitored," Kotak said.

"Retain sell with a revised fair value of 1,400 ( 1,180 earlier), driven by roll-over, an increase in the value of subsidiaries and 35 per share benefit from the PLI scheme," said Kotak.

Read all market-related news here

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.

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Published: 09 May 2024, 09:22 AM IST
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