TVS Motor Target Hiked to Rs 5,425 by Jefferies
By Business Desk
Jefferies raises TVS Motor target to Rs 5,425, citing strong exports, EV growth, and margin improvements. Maintains ‘buy’ rating.
Jefferies has increased its target price for TVS Motor Company to Rs 5,425 from Rs 4,900, maintaining a ‘buy’ rating. This upgrade reflects strong performance across exports, electric vehicles, and significant margin improvements.
The brokerage highlighted that TVS Motor’s operational profitability gap with competitors like Hero MotoCorp and Bajaj Auto is finally narrowing after a prolonged period.
- New Target Price: Rs 5,425
- Previous Target Price: Rs 4,900
- Rating: ‘buy’ maintained
Margin Growth and Cash Flow Dynamics
Despite challenges from overseas investments in Norton and TVS EBike, which have not met expectations and contributed to subsidiary losses, the company has shown resilience.
TVS Motor has demonstrated positive free cash flows, significantly improving from an average of Rs 0.7 billion between FY11-23 to Rs 7.3 billion from FY24-26, projected to reach Rs 9.5 billion by FY26.
- Increasing revenue
- Better margins
- Negative working capital
Quarterly Financial Snapshot
For the first quarter of FY27, TVS Motor reported robust financial results, underscoring its operational strength and growth trajectory.
- Net Profit: Rs 1,174 crore, up 51.3% year-on-year
- Revenue from Operations: Rs 13,896 crore, up 37.8%
- EBITDA: Rs 1,780 crore, up 41.2%
- EBITDA Margin: 12.8%, an improvement from 12.5%
The company’s shares have reflected this positive momentum, increasing by 17.12% year-to-date and climbing 34% over the past 12 months.
Jefferies’ sustained ‘buy’ rating and increased target price indicate confidence in TVS Motor Company’s continued growth, driven by strategic market performance and improving financial health despite investment headwinds.