The shares of India’s third-largest motorbike maker gained traction last week after DAM Capital Advisors gave a ‘buy’ recommendation with a 90 percent upside from today’s (Monday’s) price of Rs 1,606 a share.
Since DAM Capital issued a buy recommendation on Tuesday’s (October 10) closing price of Rs 1,528, the stock has gained around 4.91 percent.
At 10:42 a.m., on the National Stock Exchange, TVS Motor Company Ltd shares were trading at Rs 1,606 a share, up 0.30 percent from the previous close.
The company’s shares have delivered returns of 36 percent in six months and 47 percent in a year.
The company’s revenue climbed by 24 percent yearly, rising from Rs 7,315 crore in Q1FY23 to Rs 9,055 crore in Q1FY24. During the same time period, net profit increased by 48 percent from Rs 306 crore to Rs 452 crore.
The Company’s return on equity increased from 17.20 percent in FY22 to 24.13 percent in FY23, while the return on capital employed rose from 15.46 percent to 20.89 percent during the same period.
DAM Capital Advisors initiated a ‘buy’ recommendation on TVS Motor with a target price of Rs 3,051 per share, implying an upside potential of up to 90% in the next 12 months.
The rationale behind providing such a recommendation is
● Analysts expect to raise margins and improve in return ratio and estimated volume growth of more than 30 percent as the company’s exports have nearly doubled in the last five years from 16 percent to 29 percent with a volume CAGR of 13.4 percent.
● In April 2013, TVS signed a strategic collaboration agreement with BMW to manufacture sub-500cc motorcycles. In addition, On October 9, TVS Motor announced rolling out 150,000 units of BMW Motorrad’s 310cc series of motorcycles at its Hosur facility.
● TVS Motor Company’s EBITDA margin is expected to improve to 12.5 percent in the financial year 2024-25 and 13 percent the next year from 10.1 percent in the year ended March 2023. The company’s market share in African countries has improved by 150-200 basis points in the past three years, DAM Capital added.
● The brokerage highlighted that the auto maker’s market share in electric two-wheelers stands at 19 percent owing to strong sales of its iQube model.
TVS Motor Company Ltd is engaged in manufacturing of two-wheelers and their accessories. The company ranks among the top ten two-wheeler manufacturers in the world.
Written by Omkar Chitnis
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
