TVS Motor Share Price Accelerates by Nearly 6% After Q4 Results: Is it a Good Buy?

Bolstered by strong Q4 earnings, TVS Motor Company share price surged nearly 6% in early trading on the Bombay Stock Exchange (BSE) on Thursday, May 9, overcoming subdued market conditions. The shares of TVS Motor opened at ₹2,024, up from the previous close of ₹2,006.15, and quickly climbed approximately 5.7% to ₹2,121.30. By around 10:05 am IST, the stock was trading up 5.46% at ₹2,115.65 each. Meanwhile, the equity benchmark Sensex was down by 0.40% at 73,174 during the same period.

After the market closed on Wednesday, May 8, TVS Motor announced an 18% year-on-year increase in its standalone net profit, rising to ₹485 crore from ₹410 crore recorded in the corresponding period last year.

TVS Motor reported that its total sales of two-wheelers and three-wheelers, including exports, increased by 22% to 10.63 lakh units at the end of FY24, up from 8.68 lakh units in FY23. Additionally, the company's revenue from operations climbed to ₹39,145 crore in FY24, from ₹31,974 crore in the previous fiscal year.

For the fiscal year ending March 31, 2024, TVS Motor recorded a consolidated net profit of ₹1,686 crore, up from ₹1,329 crore the previous year. The company also saw its revenue from operations increase to ₹39,145 crore in FY24, compared to ₹31,974 crore in the 2022-23 fiscal year.

TVS Motor's share price has experienced significant growth over the past year, increasing by approximately 63% up to the close on May 8. This rise is nearly parallel to the performance of the sectoral index BSE Auto, which has gained 64%. In comparison, the equity benchmark Sensex has risen 19% during the same period.

TVS Motor's share price reached its 52-week peak at ₹2,313.90 on the BSE on March 7 this year. The stock experienced some profit booking in April, leading to a decline of over 4% for the month. In May, so far, the stock has seen an increase of about 1%.

Numerous brokerage firms are optimistic about the growth potential of TVS Motor, anticipating that the company will continue to outperform in terms of sales volumes. Additionally, effective cost management strategies are expected to enhance the company's profit margins.

"We expect TVS Motor's outperformance to continue on the volume front, led by premiumisation and EV product launches, while higher operating leverage and astute cost management would help on the margin front," said brokerage firm JM Financial and maintained its buy call on the stock with an unchanged target price of ₹2,100.

Emkay Global Financial Services has sustained its buy recommendation on TVS Motor stock with a target price of ₹2,250, despite reducing its EPS estimates for FY25 and FY26 by approximately 3.7% and 3.4%, respectively, following a shortfall in Q4FY24 margins. Emkay noted that TVS Motor's management remains confident in their ability to outperform the industry, both in domestic and export markets, supported by new product introductions in both the Internal Combustion Engine (ICE) and Electric Vehicle (EV) segments.