TVS Motor gains 3% after announcing alliance with Guatemala-based company

The stock was up 3% at Rs 515, close to its record high of Rs 519 on BSE in otherwise subdued market

TVS Motor Company was trading 3% higher at Rs 515 on BSE in an otherwise subdued market after the company announced its alliance with MASESA (Mayor Servicios Socieda Anonima), a Guatemala based company to strengthen its presence in Central America, Latin America, South East Asia and Middle East. The S&P BSE Sensex was down 0.19% at 30,193 at 11:53 pm.

“In this alliance, MASESA will develop exclusive TVS Motor Company concessionaires in Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica,” the two and three-wheeler manufacturer said in a press release.

The stock is trading close to its all-time high of Rs 519, touched on April 27, 2017 in intra-day trade, after announcement of January-March quarter (Q4FY17) results.

Thus far in the calendar year 2017, TVS Motor outperformed the market by surging 43% as compared to 15% rise in S&P BSE Auto index and 14% gain in the benchmark S&P BSE Sensex.

On outlook for FY 2017-18 the Company said it will introduce a new motorcycle and a new scooter. In addition to these new launches, the Company has also planned upgrades across segments to strengthen its product portfolio.

With the widest range of product across segments, TVS Motor Company expects to better its performance in the ongoing fiscal year and grow ahead of the industry, it added.

Meanwhile, most of the analysts believe that the company's current valuation captures most of the future growth prospect.

“With Victor failing to gain market share and moped growth cooling off, TVS may miss its market share guidance. We envisage multiple challenges to margins such as increase in commodity prices; higher cost from shift to BSIV emission norms; lower revenue share of mopeds; and expiry of excise duty exemption in Himachal Pradesh in FY18,” IIFL Institutional Equities said in result update.