TVS Motor Shares Take Breather Post Q4, But Brokerages See Acceleration Ahead

Profit booking trickled into shares of TVS Motor, dragging it 4% lower on April 29 as investors rushed to take home some cash off the scrip’s recent rally in the past month.

Shares of TVS Motor have clocked in nearly 13% gains in the last one month, giving investors plenty headroom to book partial profits. However, this profit booking was seen as a breather rather than a stop in TVS Motor’s uptrend trajectory.

Factors such as the company’s stellar Q4 earnings performance and expectations of solid growth in the times ahead are sparking optimism for the stock’s performance in the near-term.

Q4 Earnings Showdown

The two-wheeler maker’s Q4 results impressed the Street on all accounts. The company’s net profit jumped 75.7% year-on-year to Rs 852 crore, far higher than the Rs 485 crore that it reported in the year ago period. Revenue also grew 17% on year to Rs 9,550 crore, up from Rs 8,169 crore a year ago.

Adding cherry on top, the company’s operating margins also expanded to 14%,  a sharp improvement from the 11.3% that it clocked in the same period last fiscal.

Realisation per vehicle also grew by 5% on a sequential basis and 2% on a year-on-year basis, carried by an improved product mix and price hikes.

Brokerages Favour

Impressed by TVS Motor’s robust Q4 performance, brokerages remain optimistic, projecting strong upside potential for the stock.

Brokerage firm Morgan Stanley lifted its price target for the stock to Rs 3,126 as it retained its ‘overweight’ call on TVS. Peaking competitive intensity in the electric two-wheeler (E2W) segment, a rising share of scooters, a healthy export outlook, and a strong product cycle support Morgan Stanley’s 'overweight' stance, the brokerage wrote in its note.

Taking cues, Nuvama Institutional Equities also slightly raised its price target for the stock to Rs 3,200 as it maintained its 'buy' rating on TVS Motor. The brokerage highlighted TVS Motor’s market share gains both domestically and internationally, and predicted a continuation of this trend. “TVS's E-2W market share stood at 20% in FY25, higher than its internal combustion engine (ICE) market share, boosting confidence that the company is better positioned for the EV transition than its peers,” Nuvama said.

Furthermore, Nuvama expects TVS to expand its margin, fuelled largely by better scale and product mix, higher PLI benefits, and cost savings.

Extending the list of positive views, Emkay Institutional Equities also likes TVS Motor amid its ongoing market share gains across growth categories such as premium motorcycles, scooters, exports, and EVs.

“New launches, such as the Jupiter 110cc scooter, electric three-wheelers, and other E2Ws, are expected to support further outperformance and drive a 6.6%/5.9% EPS upgrade in FY26E/27 (27% CAGR over FY25-27),” Emkay wrote in a note.

On the other hand, Kotak Institutional Equities cautioned over moderating demand trends for domestic 2W segment in the coming quarters. Despite that though, the brokerage expects TVS Motor to continue to outperform and gain market share across most product segments, driven by newer product launches and strong brand positioning.

However, taking on a contrarian stance, KIE sees elevated stock valuations for TVS Motor, which according to the firm, might cap its upside despite baking in margin improvement and market share gain. To that effect, KIE held on to a ‘reduce’ call on TVS Motor with a price target of Rs 2,400—much lower than most other brokerage on the Street.