- Goldman Sachs raised TVS Motor's 12-month price target to Rs 4,100 from Rs 3,830
- The brokerage upgraded TVS Motor stock to Buy from Neutral rating
- TVS Motor is expected to face limited volume impact from metal and crude inflation
Multinational brokerage Goldman Sachs has raised the share price target for TVS Motor Co. as it expects the company to see relatively limited impact on volumes from metal and crude oil inflation. Analysts upgraded the stock to 'Buy' from 'Neutral' rating and revised the 12-month price target to Rs 4,100 from Rs 3,830. The new target implies an upside potential of 21% over the previous close on the NSE.
The brokerage cited the company's strong pricing power and its relatively better cushion against raw material inflation. Commodity prices have surged since the outbreak of the Iran war.
TVS Motor offers superior volume visibility compared with peers, supported by the upcoming launch of premium products. The company is also considered better placed to pass on raw material cost inflation, with a relatively limited impact on volumes from higher metal and crude prices, a note said.
Additionally, the brokerage expects a 35 basis point margin tailwind from the benefits of the Production-Linked Incentive scheme.
Shares of TVS Motor Co. traded 2.1% higher at Rs 3,461 on the NSE as of 12:30 p.m., compared to a 0.2% decline in the benchmark Nifty 50. The stock is up 41% in the last 12 months and down 9% on a year-to-date basis.
Thirty-one out of the 44 analysts tracking TVS Motor have a 'buy' rating on the stock, six recommend a 'hold' and seven suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets is Rs 4,008, which implies a potential upside of 15.4%.
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