Buy TVS Motor Company; target of Rs 4900: Choice Institutional Equities

Moneycontrol • 3 days ago

Original source

Key Investment Pillars

  • TVS Motor Company's domestic 2W ICE volumes grew 16% YoY, outperforming industry growth of 10%, driven by strong scooter sales, including the Jupiter and iQube models.
  • The company is scaling up its EV production capacity from 60,000-65,000 units/month to ~80,000 units/month, with EV profitability improving sequentially.
  • TVSL's international sales reached a record 0.539 Mn units, up 35% YoY, with growth across Africa, Latin America, and Asia, and the company is expanding its premium product offerings through Norton's Max and Atlas models.
  • The management expects good single-digit 2W industry growth in H2FY27E, supported by festive demand and improved affordability.

Thesis Validation Checklist

  • Monitor TVSL's ability to maintain its domestic market share and outperform industry growth.
  • Track the company's progress in scaling up its EV production capacity and improving EV profitability.
  • Watch for the success of TVSL's international expansion, particularly in Europe and the US, through its Norton brand.
  • Keep an eye on the company's ability to manage commodity inflation and maintain its EBITDA margin expansion.
  • Monitor the progress of TVSL's subsidiary, TVS Credit, and its potential impact on the company's overall financial performance.