Shares of TVS Motor Company fell 3.5% to the day’s low of Rs 1,932.45 on the NSE in Thursday’s early trade after brokerages retained their rating on the stock despite December quarter earnings beating estimates.
Brokerage firms Goldman Sachs and BofA retained a ‘Neutral’ stance, and Kotak Institutional Equities reiterated its ‘Sell’ call. Meanwhile, Nuvama maintained a buy view expecting the company’s outperformance to continue.

TVS Motor Company on Wednesday reported a 59% increase in its consolidated net profit to Rs 479 crore for the third quarter ended December 31, 2023, riding on the
back of robust sales across markets.

The company posted a consolidated net profit of Rs 301 crore in the October-December period of the last fiscal.

Read More: TVS Motor Q3 Results: Net profit rises 59% YoY to Rs 479 crore

Here’s what brokerages recommend:

Goldman Sachs: Neutral | Target: Rs 2,180

Goldman Sachs has maintained a ‘Neutral’ view on TVS Motor stock while raising the price target of Rs 2,180 from an earlier target of Rs 2,050.The Q3 earnings were in line with its estimates. The electric 2W distribution network is likely to double in Q4. The ongoing buoyancy in rural 2W demands to continue. Management is confident that the domestic 2W industry is poised for 10%+ annual growth, Goldman said.

BofA: Neutral | Target: Rs 2,160

BofA has maintained a neutral rating on TVS with target price estimated at Rs 2,160. While volume growth and market share gains are positive, margins were a slight miss, the US brokerage said. In the EV business, portfolio and reach expansion was a work in progress, Goldman opined.

Kotak Equities: Sell | Target: 1,180

Kotak recommended a ‘Sell’ view on TVS Motor Company holding its December quarter earnings marginally below estimates. The EBITDA was 3% below its expectations due to lower-than-expected ASPs, partly offset by commodity tailwinds. Valuations remain expensive despite building in recovery in exports and 20% market share in EV 2W space. The company reported an uptick in the >125 cc domestic 2W segment.

“We believe with the aggressive pricing strategy followed by the EV competitors, the company’s domestic ICE scooter demand and
profitability of overall ICE and EV scooter segment will come under pressure over the coming years,” Kotak said.

Nuvama: Buy | Target: Rs 2,350

Nuvama has retained its buy stance on the stock with an unchanged price target of Rs 2,350. Nuvama called TVs’ Q3 earnings strong and expected the outperformance to persist.

The revenue and EBITDA growth were robust and in line with estimates. “Going forward, we build in strong growth prospects, owing to the early stage of the 2W upcycle, market share gains and aggressive EV focus. TVSL has been gaining domestic share. We expect a further increase from 16% in FY23 to 18% in FY26E, led by increasing share of executive/premium motorcycles and EVs,” Nuvama said in a note. (You can now subscribe to our ETMarkets WhatsApp channel)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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