TVS Motor's strong Q1 drives analysts to raise price targets
TVS Motor shares surged to an all-time high on Tuesday, with the shares rising more than 6% — logging their biggest single-day gain since April 2021. Better-than-expected first quarter earnings by the two-wheeler company prompted a number of brokerages to raise their price targets on the stock. TVS shares made a record high of ₹1,388.45 before closing at ₹1,383.70 apiece on the NSE, up 5.86% from the previous close.
More than 56 lakh shares exchanged hands on the BSE and NSE, up over five times the combined average daily volume for the past one month. After Tuesday's gains, brokerages see up to 15% upside potential in TVS Motor shares. As many as 26 analysts reviewed TVS Motor's first quarter earnings, of which 11 now have a 'buy' rating on the stock, while four recommend a 'sell'.
Another 11 of them remain 'neutral', showed a Bloomberg poll of analysts. Nomura maintained its 'buy' call citing TVS Motor's industry-leading growth to continue even as operating margins were slightly below estimates. The foreign brokerage expects strong product performance across segments to drive the stock's outperformance and estimated full year FY24 and FY25 EBITDA margins at 11.3% and 11.8%, respectively, owing to marginal increase in overall costs.
CLSA and Kotak Institutional Equities maintained their sell rating citing EBITDA margin miss and expensive valuations of the stock. Both the brokerages, however, marginally raised their respective price targets. Kotak expects TVS Motor's overall profitability to be dented over the coming quarters due to the decline in domestic ICE scooter mix (more profitable segment) and increase in mix of the EV segment (less profitable) even as the recent correction on commodity prices will boost its
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