ECONOMY

TVS Motor’s Stock Jumps Most In Over Six Years Amid A Flurry Of Target  Price Upgrades

Shares of TVS Motor Co. jumped the most in more than six years after analysts hiked price targets for the two-wheeler maker citing improved exports outlook, new launches and cost cuts, among others.

The company witnessed its revenue grow by more than 50% and net profit jump threefold over the year-earlier in the quarter ended March. It also reported its highest-ever operating income, while domestic volumes and exports surged during the reported period.

Its profit rose 3% over the preceding fiscal to Rs 612 crore in FY21 despite reporting a loss of Rs 139 crore in the first quarter due to Covid-19 lockdown.

Key Q4 highlights (YoY)

  • Revenue from operations rose 53% to Rs 5,322 crore.
  • Profit after tax stood at Rs 289 crore against Rs 74 crore in the same period of FY20.
  • TVS’ two-wheeler domestic sales grew 41%, while exports jumped 74%.
  • Earnings before interest, tax, depreciation and amortisation more than doubled at Rs 536 crore.
  • Its margin stood at 10.1% on the back of “robust growth in revenue coupled with continued focus in cost reduction initiatives”. Ebitda margin was 7% in Q4FY20 and 9.5% in Q3FY21.
  • TVS Motor sold 9.28 lakh two and three-wheelers during the reported quarter, a growth of 47% over the year earlier.

Shares of the company jumped as much as 17.25%—the biggest since September 2014—to Rs 664 apiece around 11 a.m. on Wednesday. The stock, however, pared some of the gains to trade 14.06% higher at Rs 645.90 apiece.

Of the 43 analysts tracking TVS Motor, 23 have a ‘buy’ rating, eight suggest a ‘hold’ and 12 recommend a ‘sell’, according to Bloomberg data. The average of the 12-month consensus price targets implies a downside of 6.3%.

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