TVS Motor (TVSMOTOR) Shares Surge 6% Following Impressive Q4 Results: Is It Time to Invest?

• TVS Motor Company shares rose nearly 6% in early trade on BSE on Thursday, May 9, following robust Q4 results.
• The company reported an 18% YoY increase in its standalone net profit to ₹485 crore.
• TVS Motor share price has seen strong gains in the last year, rising as much as 63% till May 8 close.

TVS Motor Company shares surge following strong Q4 results, with experts remaining optimistic about the company’s growth prospects.

TVS Motor Q4 Results

TVS Motor reported an 18% year-on-year (YoY) increase in its standalone net profit to ₹485 crore from ₹410 crore reported by the company in the year-ago period. Revenue from operations rose 24% YoY to ₹8,169 crore against ₹6,605 crore in the corresponding quarter of the last financial year.

TVS Motor Share Price Trend

TVS Motor share price has seen strong gains in the last year, rising as much as 63% till May 8 close, almost in sync with the sectoral index BSE Auto, which has gained 64%. Equity benchmark Sensex has risen 19% in the last one year. The stock’s 52-week high level on the BSE is ₹2,313.90 which it hit on March 7 this year. It witnessed some profit booking in April and fell over 4% for the month. In May so far, the stock has gained about a per cent.

Should You Buy the Stock After the Q4 Result?

Several brokerage firms are upbeat about the company’s growth prospects as they expect TVS Motor’s outperformance to continue on the volume front. Additionally, cost management is expected to boost the margins. Brokerage firm JM Financial maintained a buy call on the stock with an unchanged target price of ₹2,100. JM Financial estimates TVS Motor’s revenue and EPS (earnings per share) CAGR of 14% and 24%, respectively, over FY24-26E.

Rich Valuation Caps Upside Potential

The sharp gains in the stock over the last year leave limited scope for the upside in the stock price. Brokerage firm Kotak Institutional Equities has retained a sell call on the stock, revising the fair value to ₹1,400 from ₹1,180 earlier, citing the expensive valuation of the stock at 39 times FY2025E EPS. Kotak has increased its FY2025-26 EPS estimates by 2-4% on account of higher volume assumptions, partly offset by lower other income assumptions.

Conclusion

While TVS Motor’s Q4 results have boosted the company’s share price, experts advise investors to exercise caution due to the stock’s rich valuation. The company’s growth prospects remain strong, but the limited scope for further upside in the stock price may deter some investors.