For much of the past year, investors have debated whether rising input costs would weigh on TVS Motor's profitability. The company's June quarter of FY27 (Q1FY27) performance appears to have shifted that narrative, with brokerages arguing that the worst of the margin concerns may now be behind it.
Following the results, Jefferies, Macquarie, Morgan Stanley and Kotak Securities either raised their target prices or reiterated their bullish stance amid resilient demand, improving margins and continued market share gains across key segments.
While Jefferies believes the Street is still underestimating the company's earnings potential, Morgan Stanley said the gap in volume growth with peers continues to narrow, supported by a strong international business.
ALSO READ: TVS Motor Q1 Result: Net Profit Up 51% YoY, Revenue Rises 38%; Highest-Ever Quarterly Sales Recorded
Here's What Brokerages Said After The Results:
Jefferies
- Maintained Buy and increased the target price to Rs 4,900 from Rs 4,500.
- Said the company delivered a "beat and raise", adding that Street estimates remain too low.
- Noted that two-wheeler demand remains strong in both domestic and export markets.
- Said it continues to like TVS Motor's improving franchise.
- Believes the peak of margin concerns is now behind the company.
- Said premium valuations are justified, backed by a projected 24% EPS CAGR over FY26-FY29.
Macquarie
- Maintained Outperform with a target price of Rs 4,325.
- Described the June quarter as a solid delivery in a tough quarter.
- Said margins surprised positively.
- Believes ongoing capital expenditure provides medium-term growth visibility.
- Continues to rate TVS Motor as its top pick in mobility.
Morgan Stanley
- Maintained Overweight with a target price of Rs 4,327.
- Said the volume gap between TVS Motor and its peers is narrowing.
- Believes the strong June-quarter performance brings margin expansion back into focus.
- Highlighted continued strength in international operations.
- Expects the Norton business to ramp up during FY27.
Kotak Securities
- Maintained Add and raised the target price to Rs 4,150 from Rs 3,925.
- Builds in a 10-11% volume CAGR over FY2026-FY2029.
- Increased FY2027-FY2029 EBITDA estimates by 6-7%.
- Expects TVS Motor to continue outperforming the industry and gaining market share across key product segments.
Q1 Performance
TVS Motor reported a 51.3% year-on-year (YoY) increase in net profit to Rs 1,174 crore in the June quarter, while revenue from operations rose 37.8% to Rs 13,896 crore. At the operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) increased 41.2% to Rs 1,780 crore, with the EBITDA margin improving to 12.8% from 12.5% a year ago.
The company recorded its highest-ever quarterly sales, with total two- and three-wheeler volumes rising 28% YoY to 1.63 million units. Motorcycle sales increased 19%, while scooter volumes grew 36%.
International operations remained a key growth driver, with sales rising 33% YoY to 0.47 million units. Electric two-wheeler sales surged 86% to 129,940 units, taking the company's cumulative EV customer base past the one million mark. Three-wheeler sales also rose 48%, reflecting broad-based demand across domestic and export markets.
Despite a sharp rise in commodity prices during the quarter, TVS Motor said it mitigated the impact through calibrated price increases, cost optimisation measures and benefits from higher production volumes.
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