TVS Motor’s Stock Jumps Most In Over Six Years Amid A Flurry Of Target Price Upgrades
TVS Motor Company employees work on the vehicle production line. (Photographer Dimas Ardian/Bloomberg)

TVS Motor’s Stock Jumps Most In Over Six Years Amid A Flurry Of Target Price Upgrades

Shares of TVS Motor Co. jumped the most in more than six years after analysts hiked price targets for the two-wheeler maker citing improved exports outlook, new launches and cost cuts, among others.

The company witnessed its revenue grow by more than 50% and net profit jump threefold over the year-earlier in the quarter ended March. It also reported its highest-ever operating income, while domestic volumes and exports surged during the reported period.

Its profit rose 3% over the preceding fiscal to Rs 612 crore in FY21 despite reporting a loss of Rs 139 crore in the first quarter due to Covid-19 lockdown.

Key Q4 highlights (YoY)

  • Revenue from operations rose 53% to Rs 5,322 crore.
  • Profit after tax stood at Rs 289 crore against Rs 74 crore in the same period of FY20.
  • TVS’ two-wheeler domestic sales grew 41%, while exports jumped 74%.
  • Earnings before interest, tax, depreciation and amortisation more than doubled at Rs 536 crore.
  • Its margin stood at 10.1% on the back of “robust growth in revenue coupled with continued focus in cost reduction initiatives”. Ebitda margin was 7% in Q4FY20 and 9.5% in Q3FY21.
  • TVS Motor sold 9.28 lakh two and three-wheelers during the reported quarter, a growth of 47% over the year earlier.

Shares of the company jumped as much as 17.25%—the biggest since September 2014—to Rs 664 apiece around 11 a.m. on Wednesday. The stock, however, pared some of the gains to trade 14.06% higher at Rs 645.90 apiece.

Of the 43 analysts tracking TVS Motor, 23 have a ‘buy’ rating, eight suggest a ‘hold’ and 12 recommend a ‘sell’, according to Bloomberg data. The average of the 12-month consensus price targets implies a downside of 6.3%.

Here’s what analysts have to say about TVS Motor’s Q4 performance:

Prabhudas Lilladher

  • Upgrades to ‘buy’ from ‘sell’, hikes target price to Rs 658 from Rs 470 apiece.
  • Surprised with sequential gross margins expansion by 80 basis points at 24.7% as cost control and price hikes offset raw material impact.
  • Expects near-term volume challenges withstanding due to lockdown, while double-digit Ebitda performance to sustain.
  • Further sharp improvement in Indonesia, balance sheet turning net cash are key upgrade catalysts.
  • Aggressive new launches both in India and overseas should help drive continued market share gains.
  • Two-wheeler EV iQube launched in more than 20 cities and plans to launch three-wheeler EV.

Nirmal Bang

  • Maintains ‘buy’ rating, raises target price to Rs 696 from Rs 684 apiece.
  • Increasing focus on EVs, digital footprint and majority of the capex for FY22 marked for the same are in the right direction.
  • Domestic demand is expected to bounce back once activity levels normalise, while export demand momentum should sustain.
  • While TVS is slightly cautious on its margin trajectory in the near term due to lockdowns and muted consumer sentiments in Q1 FY22, it remains confident of sustaining positive Ebitda growth over the medium term.
  • Management expects demand to bounce back strongly once economic activity levels normalise post Q1 FY22.
  • It took price hikes of 1% in January and 1.6% in April in both domestic and international markets to offset commodity cost headwinds.
  • The company expects new launches, continued cost-control initiatives, better mix and premiumisation trends to cushion margins in the medium term.


  • Maintains ‘buy’ rating, hikes target price to Rs 800 from Rs 750 apiece.
  • Delivered 2-6% Ebitda/profit after tax growth in FY21 despite Covid-19 and rising input costs.
  • “Indian two-wheeler demand has weakened amid Covid-19 spike, but we still see cyclical recovery in FY22-23.”
  • “We continue to like its product capabilities which have helped it gain market share across scooters, premium motorcycles and exports in recent years.”
  • TVS has managed the cost inflation well delivering margin expansion in this period.
  • TVS has embraced the electrification disruption and is turning more aggressive with a considerable part of incremental investment earmarked for EVs.
  • “We think the stock deserves a premium over Hero and Bajaj given its strong earnings outlook, the potential for margin expansion and a gradually improving franchise.”


  • Maintains ‘outperform’ rating, raises target price to Rs 665 from Rs 600 apiece.
  • “TVS Motor Q4 results were significantly ahead of our and consensus expectations.”
  • While commodities continue to inch upwards, the company was able to mitigate the impact via price hikes and better mix (exports and scooters).
  • “While the stock continues to trade at a premium to its peers Hero Motocorp and Bajaj Auto, we believe this can continue due to share gains, higher EPS growth and improving free cash flow conversion.”
  • Management expects weak Q1 FY22 demand due to lockdowns but strong market recovery in the rest of the year.
  • Any material increase/decrease in the company’s two-wheeler market share represents potential upside/downside for the stock.

Emkay Financial

  • Upgrades to ‘buy’ rating, raises target price to Rs 730 from Rs 570 apiece.
  • Earnings margin expanded to 10.1% mainly due to lower-than-expected impact of commodity inflation, cost savings and inventory gains.
  • Export outlook is encouraging across most markets on higher commodity prices and better forex availability for importers.
  • “Over FY21-24, we expect robust earnings growth (39% CAGR) and strong free cash flow generation.”

Motilal Oswal

  • Maintains ‘neutral’ rating with a target price of Rs 635 apiece.
  • TVS’ operating performance was led by lower-than-expected cost inflation, price hikes, a favorable mix, and cost reduction initiatives.
  • While the lockdown is likely to impact in the near term, export strength, coupled with a continued focus on cost management, would support profitability.
  • Pan-India vaccinations may lead to high growth in the second half of FY22. Rural demand would remain strong on the back of a normal monsoon season and high crop yield. Exports would see growth in all key markets.
  • The Indonesia business has turned PBT positive.
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