Unlocking Potential: ICICI Securities Raises Price Target for TVS Motor Co Ltd
Revving up its outlook, ICICI Securities has boosted the price target for TVS Motor Co Ltd (TVSL:IN) shares to INR 2,596 from INR 2,245, while reaffirming its Add (2) rating on the stock. This upgrade comes on the heels of TVS Motor’s impressive performance, with the company achieving a record margin of 11.5%. This not only exceeded consensus estimates by 0.2% but also marked a 0.9% year-on-year improvement.
Despite a 0.7% rise in the electric vehicle (EV) mix in the first quarter of the fiscal year 2025, TVS Motor managed to raise its margin by 0.1% from the previous quarter. The firm from ICICI Securities pointed out the company’s consistent advancement up the profitability curve, buoyed by expectations of rural demand recovery and robust growth in the upcoming quarter, fueled by hopes of a normal monsoon.
Their analysis indicates that TVS Motor is well-poised to achieve an EBITDA margin (EBITDAM) of 12-12.5% in the fiscal years 2025-2026. This forecast is underpinned by the company’s capacity to scale electric two-wheeler (e2W) production to over 30,000 units per month and achieve a compound annual growth rate (CAGR) of 10% in overall volume from 2024 to 2026.
The revised price target reflects a valuation rollover and implies a 30 times multiple of the company’s standalone earnings per share (EPS) for the fiscal year 2026. This bullish outlook underscores confidence in TVS Motor’s strategic initiatives and its potential for sustained financial performance in the years ahead.
With ICICI Securities’ updated forecast and maintained rating, TVS Motor appears to be on a promising trajectory. The company’s focus on enhancing profitability and seizing growth opportunities, especially in the electric vehicle segment, bodes well for its future prospects.
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