TVS Motor gains 3%, hits record high on healthy demand outlook

Shares of TVS Motor Company hit a record high of Rs 1,184.65, as they rallied 3 per cent on the BSE in Wednesday's intra-day trade on healthy demand outlook. The stock surpassed its previous high of Rs 1,177, touched on October 19, 2022. In comparison, the S&P BSE Sensex was down 0.18 per cent at 59,620 at 11:30 AM.

In the past one month, TVS Motor has outperformed the market by surging 13 per cent, as compared to 3.6 per cent rise in the S&P BSE Sensex, and 7 per cent rally in the S&P BSE Auto index.

On Monday, April 17, TVS Motor Company launched the TVS NTORQ 125 Race Edition at the Makina Auto Show in Philippines. TVS NTORQ 125 Race Edition comes with TVS SmartXonnectTM that lets the rider connect their smartphone to the scooter, unlocking a host of smart connected features. These can be accessed through an advanced fully digital instrument cluster that is loaded with 60 plus features.

The Management expects to grow ahead of industry, both in domestic and international markets, with a strong brand portfolio that includes Apache, Raider, Jupiter, NTORQ, HLX Series, Radeon, Ronin, TVS King, and EV TVS iQube. Further, given the improved chip availability, management expects higher production of premier products. Management expects better operating leverage, increased premiumisation owing to a smoother supply of semiconductors, and a continued focus on cost reduction to support further Ebitda margin gains in Q4FY23.

On the exports front, the company believes that external risks have peaked in October-December quarter (Q3) and the macro situation should brighten in January-March quarter (Q4), analysts at BoB Capital Markets said in a result update.

The brokerage firm believes the focus on premiumisation would safeguard margins, and any easing of raw material cost will offer added cushioning. TVS Motor will continue to beat industry growth as high-end EV/traditional segment launches will further rejuvenate the portfolio, it added.

TVS Motor had announced strategic engagement with Amazon India to strengthen electric mobility, electric infrastructure and connected services and strengthening its commitment to achieving net-zero carbon.

"Volume growth is likely to be driven by a recovery in the domestic 2W market, new products (Raider and Ronin) and a ramp-up in exports. TVS Motor is enjoying the benefits of economies of scale and operating leverage, resulting in consistent double-digit EBITDA margin. However, TVS Motor earns ~40 per cent of its overall EBITDA from the domestic scooter business, making it most vulnerable to EV disruption," analysts at Cholamandalam Securities had said in their Q3 result update.