TVS Motor share price gains 2.63% to scale 52 week high on its foray into Vietnam

TVS Motor Company Ltd share price saw gains of 2.63% to 52 week highs of 1784 on the BSE in the morning trades on Thursday, on news flow around its entry into Vietnam. TVS Motor on Thursday announced its entry into Vietnam in collaboration with Minh Long Motors – its distribution partner. TVS Motor Company said that it will offer a range of scooters and underbone motorcycles, across multiple price points, in keeping with its commitment to responsible and sustainable mobility. 

TVS Motor's entry into Vietnam is its second major global foray in two weeks. Last week the company announced its entry into Europe starting with France.

TVS Motor Company already has been doing well in exports and the Global expansions now improve its growth outlook further.

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As per Jefferies India Pvt Ltd data TVS motors with its attractive product propositions, has gained market share from 17% to 26% in two-wheeler exports, over FY18 to 1HFY24 and from 22% to 44% in three-wheeler exports. Thus, the foray into new markets will further provide impetus for TVS Motors exports.

Notably the export volume that had remained soft for the industry owing to geopolitical issues and in  the rising interest rate era have started improving . For TVS Motor Company two-wheeler exports of 2.39 Lakh units in the quarter ended September 2023 while improved sequentially were also not much less compared to 2.52 Lakh units in the quarter ended September 2022.

Notably TVS Motors is growing well in Domestic arena. During the September quarter TVS Motorcycle sales grew by 3% registering 4.93 Lakh units in the quarter ended September 2023 as against 4.77 Lakh units in quarter ended September 2022. Scooter sales for the quarter ended September 2023 grew by 10% registering 4.20 Lakh units as against the sales of 3.83 Lakh units in the second quarter of 2022-23.

Company’s motorcycles, scooters and Electric Vehicle sales are showing market share gains. Jefferies Data over FY18 to 1HFY24 had indicated a rise in market share from 16% to 23% in scooters, and from 7% to 10% in motorcycles, TVS has risen to #2 position in Electric two wheelers with 24% market share in August-October period. TVS launched a premium electric scooter 'X' in August and plans to significantly expand its two-wheeler and three wheeler EV portfolio, along with network expansion in India and entry in international markets.

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Analysts at Jefferies India Ltd post Q2 results had said that they see strong 35% Earnings per share CAGR over FY23-26 and their FY24-25 estimated EPS is 5-10% above street. TVS' 28 times FY25 estimated price to earnings ratio appears rich (CY15-23 average: 28 time), but analysts at Jefferies believe premium valuations will sustain on strong growth outlook and improving franchise

Analysts at Prabhudas Lilladher post Q2 results also had said that  TVS is well placed to outperform the industry given  a good tractions for new product launches in ICE & EV segments, higher focus on exports & premiumisation and margin improvement helped by cost control,  operating leverage,  benign input prices. The PLI benefits are to likely offset impact from higher EV mix, they added

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