Growth in mopeds, competition in SCVs key concerns for TVS: JM Financial

However, TVS has underperformed motorcycle and scooter markets

Lack of growth in long term in moped segment and competition in the small commercial vehicle segment are key concerns for TVS Motors, says brokerage JM Financial.

"In the mopeds segment, TVS remains the only player but lack of growth triggers in long term is a concern," JM Financial analysts said in a note to clients.

The brokerage also expects competition in SCV segment is heating up. "While entry in three wheelers has helped TVS diversify its business model, lack of growth visibility and increasing competition from SCV segment remains a worry. While passenger variants of SCV are gaining traction in non-permit markets, Bajaj Auto (market leader) has developed a four-wheeler as replacement for three wheelers," analysts said.

Although, TVS has underperformed motorcycle (volumes witnessed 2% CAGR during FY03-12 vis-à-vis industry growth of 12%) and scooter market (FY13 market share down to 15% vs 18% in FY03) in the last decade, new model launches along with aggressive refreshes could help revive volume growth in medium to long run, anlaysts said.