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Investing.com - CLSA has raised its price target on TVS Motors (TVSM:IN) to INR4,057.00 from INR3,992.00 while maintaining an Outperform rating on the stock.
The research firm noted that TVS Motor’s second-quarter fiscal 2026 EBITDA was in line with consensus, though the EBITDA margin of 12.7% came in 20 basis points below expectations. Excluding PLI benefits, the EBITDA margin expanded 50 basis points year-over-year from 11.7% to 12.2%, driven by scale advantages.
CLSA observed that margin expansion could have been higher but was partially offset by increased packing and freight expenses related to the festive season, launch expenses, and higher-than-normal R&D costs.
The firm highlighted that TVS Motors expects approximately 8% growth in the internal combustion engine two-wheeler industry for fiscal 2026, benefiting from GST cuts, compared to roughly 1% growth in the first half of the fiscal year. The launch of its INR100,000 electric two-wheeler model Orbiter should help maintain market share amid rising competition.
CLSA’s revised target price is based on a sum-of-the-parts valuation implying 29 times core FY28 earnings per share, which aligns with the company’s 10-year average 12-month forward traded price-to-earnings ratio.
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