Expert Opinions: Should You Buy TVS Motor Shares Before the Next Earnings Report?

In this article, we will discuss

TVS Motor: An Overview of this Indian Automobile Leader

Founded in 1978, TVS Motor is part of the prestigious TVS Group, which traces its origins back to 1911. Today, it is a global conglomerate that has firmly established itself as one of the leading two-wheeler and three-wheeler manufacturers in India. The company has also gained a significant presence across several international markets.

TVS Motor's product portfolio is diverse — encompassing a wide range of motorcycles, scooters and even auto-rickshaws. It has been at the forefront of introducing cutting-edge technology in the automotive sector, having been among the first in India to launch electric vehicles (EVs). The TVS iQube Electric scooter is a testament to the company's innovative approach towards addressing the growing demand for eco-friendly transportation options.

TVS Motor Company operates four manufacturing facilities, three of which are located in India in Hosur, Mysuru, and Nalagarh. The fourth is located in Karawang, Indonesia. These plants leverage advanced manufacturing techniques to ensure high-quality products for distribution in India and abroad.

TVS Motor's success stems from its strong focus on research and development (R&D), which allows it to offer products that meet the evolving needs of consumers. Its R&D efforts are geared towards enhancing fuel efficiency, reducing emissions and improving the overall performance and aesthetics of its vehicles.

Moreover, TVS Motor also has a significant global footprint since it exports automobiles to over 60 countries. This international presence reflects the company's robust global strategy and its ability to compete in the highly competitive international automotive market. Through continuous innovation, strategic expansion and a deep commitment to quality and sustainability, TVS Motor Company continues to drive forward and shape the future of mobility both in India and around the world.

Decoding TVS Motor Company’s Q3 Earnings

Like most auto stocks TVS Motor Company also reported positive Q3 results. The company’s net profits for the quarter from October to December 2023 came in at ₹479 crore. This marks a 59% jump from its consolidated net profit of ₹301 crore during the third quarter of the previous financial year.

In addition to its improved profitability, the company also recorded strong sales across different market segments. Its operational revenue rose from ₹6,545 crore in Q3FY23 to ₹8,245 crore in Q3FY24.

The company’s two-wheeler sales, in particular, recorded a notable increase to over 10 lakhs in this year’s third quarter as opposed to a little over 8 lakhs in Q3 last year. TVS Motor Company also exported 2.16 lakh two-wheelers in the quarter under review. These figures point to a lucrative quarter for the automaker, overall.

How Did TVS Motor Share Price React to its Q3 Earnings?

Despite the company’s earnings surpassing many estimates, the TVS Motor share price fell by around 3.5% in the aftermath of the announcements. The reasons behind this anomaly can be traced back to other triggers like weak recovery of exports and draining cash flows due to investments in subsidiaries. These were some of the key factors that drove the pessimism in the market, even though the company’s financials presented a starkly different and mostly positive picture.

TVS Motor Share Price Target 2024: What Are Experts Saying?

In the immediate aftermath of the Q3 results, many brokerages revised their once-bullish stance on TVS Motor share price targets. Kotak Institutional Equities continued to take a ‘sell’ stance. Nuvama was among the few firms that remained bullish on the stock and expected it to continue to outperform the markets.

Goldman Sachs and BofA, however, remained neutral — with the former raising the TVS Motor share price target to ₹2,180 from the previous target of ₹2,050, and the latter setting a TVS Motor share price target of ₹2,160. The TVS Motor share price target set by BofA was already breached mid-February — when the company’s stock price hit a new high of ₹2177.95 on the NSE.

To Buy or To Sell: What’s the Verdict?

While the market’s reaction to TVS Motor Company’s earnings in January may have been lukewarm, the stock has since recovered its goodwill among investors. Currently, TVS Motor’s future share price predictions appear optimistic. Following its 2.25% rise on the bourses in February 2024, experts are looking at the stock in a new light.

With strong trading volumes and a breakout of a 2.5-month-long consolidation, TVS Motor share price targets appear to be bullish as the market anticipates its next earnings report for the fourth and final quarter of FY24.

The immediate TVS Motor share price target as of February 19, 2024, is as high as ₹2,300. Experts even expect that the stock has the potential to move further upward, so TVS Motor’s future share price targets may be revised accordingly, depending on how the stock performs as this quarter progresses.

The Outlook for TVS Motor Company Before the Next Earnings Report

As the market anticipates further upside to TVS Motor’s future share price, the company has both strengths and limitations that you need to watch out for. On the upside, with the company’s market cap having recently breached the ₹1 lakh crore mark and its share price having hit a 52-week high, the demand for the scrip may help sustain its upward momentum. Its robust export profile and the continuing demand for the company’s passenger vehicles are also key strengths that may work in the company’s favour.

On the flip side, the primary risk stems from the fact that the company’s sales in Q3FY24 were driven largely by the festive season. Whether or not the momentum remains steady in the fourth quarter of this fiscal year remains to be seen. However, most analysts are optimistic about the automaker’s performance in the next earnings season. What’s more, TVS Motor Company’s strong EBIT growth also brings some added resilience to the entity’s financials.

Focus on Research to Make a Smart Investment Decision

The TVS Motor share price target set by experts can give you a baseline idea of how the company may be expected to perform in the current quarter. However, it’s imperative that you perform your own research to assess how TVS Motor’s future share price may behave. The Samco trading app can help you with this, with real-time market metrics, stock ratings, research observations, feeds and more — all of which can help you carry out an in-depth analysis of any stock you’re interested in.

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Disclaimer: INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE INVESTING. The asset classes and securities quoted in the film are exemplary and are not recommendatory. SAMCO Securities Limited (Formerly known as Samruddhi Stock Brokers Limited): BSE: 935 | NSE: 12135 | MSEI- 31600 | SEBI Reg. No.: INZ000002535 | AMFI Reg. No. 120121 | Depository Participant: CDSL: IN-DP-CDSL-443-2008 CIN No.: U67120MH2004PLC146183 | SAMCO Commodities Limited (Formerly known as Samruddhi Tradecom India Limited) | MCX- 55190 | SEBI Reg. No.: INZ000013932 Registered Address: Samco Securities Limited, 1004 - A, 10th Floor, Naman Midtown - A Wing, Senapati Bapat Marg, Prabhadevi, Mumbai - 400 013, Maharashtra, India. For any complaints Email - Research Analysts -SEBI Reg.No.-INHO0O0005847.

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