Emkay Global Financial has given Buy recommendation for TVS Motor Company with a target price of Rs. 770 in its research report issued on May 05, 2022

Emkay Global Financial’s report on TVS Motor Company

Q4FY22 EBITDA rose 4% yoy to Rs5.6bn, but was below our estimate of Rs6.1bn due to lower-than-expected gross margin. Revenues grew by 4% to Rs55.3bn, broadly in line with estimates. We retain our view of a turnaround in the domestic 2W industry in FY23E, with growth of 11%, and TVSL should gain share owing to its lower exposure to entry-level motorcycles. Our channel checks indicate that Q1FY23 volumes should see support from festive/marriage season demand and a recovery in student demand. Led by a recovery in domestic 2W volumes (14% CAGR), we expect a 13% CAGR in total volumes over FY22-24E. TVSL is aggressively focusing on the EV space, with multiple launches lined up in 2Ws/3Ws in the next two years, R&D collaboration with BMW and investment in electric bike maker Ultraviolette.


We build in revenue/earnings CAGRs of 15%/27% for FY22-24E. Retain Buy with a TP of Rs770 (Rs740 earlier), based on 23x Jun’24E EPS (Mar’24E earlier) and the value of TVS credit services at Rs27/share.

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