The shares of the third largest two-wheeler manufacturing company in India, TVS Motor Company Limited declined marginally on Friday’s trading session and were trading at Rs 1,020 levels. In the past year, the stock has rallied and gained approximately 58 percent in the period.
TVS Motor Company is a reputed automobile company engaged in the production of two-wheelers and three-wheelers in India. The company also has footprints globally, including geographies like the Middle East, Africa, SE Asia, the Indian subcontinent, and Latin & Central America.
The company has also ventured into the Electric Vehicle segment and acquired a 19% market share in the high-speed electric scooter segment in FY 21-22. In December 2022, the company was able to sell 11,071 units and became the second-highest seller.
In Q2FY23, the company reported a total revenue of Rs 8,560.76 Crore which increased 32 percent Year on Year from Rs 6,483.42 Crore and 17 percent Quarter on Quarter from Rs 7,315.7 Crore.
In the period their net profit stood at Rs 389.1 Crore, representing a 67 percent Year on Year growth from Rs 232.82 Crore. On a sequential basis, their profits grew by 27 percent from Rs 306.31 Crore.
Global Brokerage firm Jefferies is bullish on the stock and has a ‘Buy’ rating with a target price of Rs 1,550 per share which means an upside of 52 percent from the current levels.
“Most stocks are trading near or below their respective last 10- year average PE on our FY24 estimates; we find this attractive in the context of a strong earning cycle. We believe that strong volume growth, coupled with healthy margin expansion, will drive double-digit earnings CAGR for most of our covered OEMs over the next 2-3 years,” the brokerage firm said.
Written by Anoushka Roy
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