TVS Motor delivered an in-line operating performance, excluding the PLI benefit. Adjusted PAT grew 42% YoY to Rs 6.9 billion, broadly in line with our estimate of Rs 6.75 billion. For FY25, the company posted a strong 30% YoY growth in PAT to Rs 27.1 billion. While TVS Motor is expected to continue outperforming in the scooters segment, its underperformance in the motorcycles segment remains a concern. Additionally, two-wheeler industry demand has weakened following the festive season.
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Motilal Oswal Report
The recently launched Jupiter 110 has been well-received by customers and is likely to support TVS Motor Company Ltd. in gaining market share in scooters over the coming quarters.
However, in motorcycles, for the first time in many years, TVS Motor has underperformed the industry in FY25. More importantly, it has underperformed in the 125cc segment, which has been a key growth driver in recent years.
Further, the demand outlook in domestic markets has remained weak following the festive season, while the exports outlook also continues to be uncertain.
Given these factors, we believe TVS Motor at 42x/35.8x FY26E/FY27E EPS appears fairly valued.
Reiterate Neutral with a target price of ~Rs 2,720 (based on ~32x FY27E EPS and Rs 212/share for the NBFC).
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