TVS shares reached a record high of ₹1,388.45 before closing at ₹1,383.70 per share on the NSE, a 5.86% increase from the previous close. The BSE and NSE saw over 56 lakh shares traded, more than five times the average daily volume for the past month.
Following Tuesday’s gains, brokerages believe there is up to 15% potential upside in TVS Motor shares.
A total of 26 analysts reviewed TVS Motor’s first quarter earnings, of which 11 now have a ‘buy’ rating on the stock, while four recommend a ‘sell’. Another 11 remain ‘neutral’, according to a Bloomberg poll of analysts.
Nomura maintained its ‘buy’ rating, citing TVS Motor’s industry-leading growth that is expected to continue, despite slightly below estimated operating margins. The foreign brokerage anticipates strong performance across all segments to drive the stock’s outperformance and projects EBITDA margins of 11.3% for FY24 and 11.8% for FY25, respectively, due to slight increases in overall costs.
CLSA and Kotak Institutional Equities maintained their ‘sell’ ratings due to the stock’s EBITDA margin miss and expensive valuations. However, both brokerages slightly raised their price targets.
Kotak predicts that TVS Motor’s overall profitability will be affected in the coming quarters due to a decline in the profitable domestic ICE scooter segment and an increase in the less profitable EV segment, despite recent improvements in commodity prices that will boost profitability.