What should investors do with TVS Motor post Q3 results? Brokerages see 10-50% upside

Most global brokerage firms have maintained their rating on TVS Motor Company Ltd after the two-wheeler maker reported an 8.3 per cent YoY rise in the standalone profit at Rs 288 crore for the quarter ended December 31, 2021.

It had posted a profit of Rs 266 crore in the corresponding quarter last year. Revenue from operations grew 5.8 per cent on a YoY basis to Rs 5,706 crore against Rs 5,391 crore posted last year.

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The most aggressive target price of Rs 1000 was put out by UBS which translates into an upside of nearly 57 per cent from Rs 637 recorded on 7 February.  

EBITDA stood at Rs 567 crore, up 11% YoY to Rs 511 crore posted last year. It reported a margin of 9.9% in Q3FY22 against 9.5% posted in Q3FY21.

We have collated a list of recommendations from various global brokerage firms according to a Zee Business TV report:

UBS: Buy| Target Rs 1000

UBS maintained its buy rating on TVS Motor Company post December quarter results with a target price of Rs 1000 that translates into an upside of nearly 57 per cent from Rs 637 recorded on 7 February.

Q3 was all round upbeat for the two-wheeler maker. The company sounded confident on sustaining profitability trends led by improving mix (geographic & product), & sustained cost reduction efforts in the upcoming quarters.
 
The company is well positioned to capitalize on trends of electrification, premiumization and softwarisation, said the note.

CLSA: Outperform| Target Rs 711

CLSA upgraded TVS Motor to outperform post December quarter results and raised the target price to Rs 711 from Rs 656 earlier translates into an upside of over 11 per cent from Rs 637 recorded on 7 February.

The company maintained its margins despite rising costs, which is a positive sign. Higher net realisations led to EBITDA beat in Q3. Going forward, the global investment bank is of the view that export demand to remain strong.

Macquarie: Outperform| Target Rs 810

Macquarie maintained its outperform rating on TVS Motor Company post December quarter results with a target price of Rs 810 that translates into an upside of over 27 per cent from Rs 637 recorded on 7 February.
 
The December quarter earnings beat was led by 40bps sequential margin expansion, strong exports momentum and healthy pipeline for new launches.

The global investment bank revises FY22E & FY23E earnings by less than 1%, said the note.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)