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HomeMarketTVS Motor shares face promote score on restricted progress outlook By

TVS Motor shares face promote score on restricted progress outlook By


On Thursday, Ambit Capital started protection on TVS Motor Co Ltd (TVSL:IN), issuing a promote score with a worth goal of INR 2,072.00. The agency’s evaluation means that the corporate’s spectacular efficiency over the previous 5 years might not maintain resulting from challenges within the home two-wheeler (2W) market and the potential affect of electrical automobile (EV) disruption.

TVS Motor has seen market share and margin enlargement, attributed to filling gaps in its product providing and fewer aggressive competitors. Nonetheless, Ambit Capital forecasts that the corporate’s outperformance within the home 2W market might diminish. That is partly due to the restricted areas the place TVS Motor can increase its portfolio and the truth that opponents are beginning to strengthen their market methods.

The corporate’s export enterprise is anticipated to proceed rising above the trade common because it enters new markets. Regardless of this, the rise of electrical automobiles poses a menace, notably resulting from TVS Motor’s give attention to scooters and bikes above 125cc, which can be extra prone to shifts in shopper choice in direction of EVs.

Ambit Capital additionally notes that additional enlargement of TVS Motor’s EBITDA margin past 12.0-12.5% could possibly be difficult. The corporate’s numerous however fragmented portfolio might restrict economies of scale, and the absence of section management may scale back its pricing energy.

The promote score comes with a good worth estimate primarily based on a reduced money movement evaluation and the worth of investments. The worth goal displays a 27.5 instances a number of of the corporate’s projected core earnings for the fiscal yr 2026, indicating that the present valuation could also be overly optimistic given the anticipated dangers.

This text was generated with the help of AI and reviewed by an editor. For extra info see our T&C.


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