TVS Motor shares target increased by ICICI on profitability gains
On Wednesday, ICICI Securities updated its outlook on TVS Motor Co Ltd (TVSL:IN) shares, increasing the price target to INR 2,596 from the previous INR 2,245. The firm maintained its Add (2) rating on the stock.
This decision follows TVS Motor’s recent performance, where the company reported a record margin of 11.5%, which is a 0.2% increase from the consensus and a 0.9% year-over-year improvement.
The margin also saw a 0.1% rise from the previous quarter despite the electric vehicle (EV) mix growing by 0.7% and 0.1% in the first quarter of the financial year 2025.
The analyst from ICICI Securities noted TVS Motor’s consistent progress up the profitability curve, emphasizing the company’s expectation for rural demand recovery and strong growth in the second quarter, bolstered by the anticipation of a normal monsoon.
The firm’s analysis suggests that TVS Motor is well-positioned to achieve an EBITDA margin (EBITDAM) of 12-12.5% in the fiscal years 2025-2026. This projection is based on the company’s ability to scale electric two-wheeler (e2W) production to over 30,000 units per month and a compound annual growth rate (CAGR) of 10% in overall volume from 2024 to 2026.
The revised price target of INR 2,596 is primarily driven by a valuation rollover, according to the analyst’s statement. The target price implies a 30 times multiple of the company’s standalone earnings per share (EPS) for the fiscal year 2026.
The analyst’s outlook reflects a confidence in TVS Motor’s strategic initiatives and its potential for sustained financial performance in the coming years.
TVS Motor’s recent quarter’s performance, combined with ICICI Securities’ positive outlook, suggests a favorable trajectory for the company.
The updated price target and maintained rating are reflective of the company’s continued efforts to enhance profitability and capture growth opportunities, particularly in the electric vehicle segment.
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