TVS Motor hits 52-week high on 28% jump in Q1 profit
Shares of two-wheeler major TVS Motor Company hit a 52-week high on Wednesday as the company recorded 28% growth in its net profit for the first quarter of 2024-25. Shares opened a gap up and hit the day's high at ₹2,620.20 on the BSE, its one-year high. At the current share price of ₹2,567.95 (11.57 AM), the company's m-cap stands at ₹1,21,928.73 crore. TVS Motors shares have seen a 91.53% rise in the past year, surging from ₹1,340 on August 5, 2023, to ₹2,567 on Tuesday. In the year-to-date period, the scrip has risen 27.02%.
TVS Motor Company’s revenue in the April-June quarter of FY25 was ₹8,376 crore, up 16% against ₹7,218 crore in the quarter ending June 30, 2023. EBITDA of ₹960 crore came with a growth of 26% against ₹764 crore in the year-ago period. The company’s operating EBITDA margin improved 90bps at 11.5% vs 10.6% in the same period last year. Profit at ₹577 crore recorded a growth of 23% for the first quarter of 2024-25 as against ₹468 crores in the first quarter of 2023-24.
The company's overall two-wheeler and three-wheeler sales including exports grew 14% to 10.87 lakh units in the said quarter against 9.53 lakh in the same period last year. Motorcycle sales surged 11% to 5.14 lakh while scooter sales surged 19% to 4.18 lakh units. Three-wheeler sales stood at 31,000 lakh units, a decline from 35,000 units during the first quarter of 2023-24. The company sold 52,000 electric scooters in Q1 FY25 vs 39,000 in the year-ago period. During Q1, TVS introduced new variants to the TVS iQube portfolio. TVS iQube comes in three battery options -- 2.2 kWh, 3.4kWh and 5.1kWh.
Brokerage PhillipCapital, in its latest report, has maintained a "NEUTRAL" rating on the auto stock, with a price target of ₹2,261, down 9% from Tuesday's levels. "The company’s margins continue to impress, on better mix and sustained cost reduction. Though the export market continues to be a concern led by certain African markets, we expect TVS’s geography expansion plans and investments to partially cushion it. We finally get clarity on the Norton launch plans, which seems impressive considering a new affordable product portfolio, which would also target the growing domestic premium 2W segment. However, the valuation is rich and is factoring in the positives, as we value it at 27x FY26e EPS + the value of subs at ₹2,261. Maintain Neutral," writes the brokerage in its client report.
Other key Q1 highlights:
TVS expects the 2W industry to grow more than 10% in FY25 and has a good medium to long-term outlook.
TVS says the rural market outperformed urban after a long time and expects it to recover on good monsoon, improving road infrastructure and economic situation.
TVS says there are challenges in select African markets, due to currency devaluation and persistent inflation; expects to see some improvement.
TVS says Bangladesh is a small part of its revenue mix; it sees an opportunity in the Middle East, while in the LatAm region, it is outperforming the industry.