TVSMOTOR - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.2

📊 Core Financials Analysis

Profitability & Growth

Strong quarterly PAT growth from ₹562 Cr. to ₹638 Cr. (QoQ increase of 68.9%) reflects robust earnings momentum.

ROE at 28.4% is outstanding, indicating excellent shareholder value creation.

ROCE of 15.4% is healthy, though slightly below top-tier industrial benchmarks.

EPS of ₹47.1 supports strong earnings visibility.

Debt & Liquidity

Debt-to-equity ratio of 3.36 is high — a red flag that warrants monitoring, though manageable given strong cash flows.

Dividend yield of 0.36% is modest, suggesting reinvestment focus.

Cash Flow

While direct data isn’t provided, consistent profitability and scale imply solid operating cash generation.

📉 Valuation Metrics

Metric Value Remarks

P/E Ratio 61.3 Very high vs. industry PE of 31.1

P/B Ratio ~15.6 Premium valuation

PEG Ratio 1.46 Slightly overvalued based on growth

Intrinsic Value Slightly Overvalued But supported by strong fundamentals

PEG above 1 and high P/E suggest the stock is priced for growth — justified if momentum sustains.

🏍️ Business Model & Competitive Edge

TVS Motor Company is a leading two-wheeler and three-wheeler manufacturer with a strong presence in domestic and export markets.

Competitive advantage lies in its innovation (e.g., electric vehicles), brand strength, and wide distribution network.

Benefiting from rising demand in mobility, premium segment expansion, and EV adoption.

📌 Entry Zone & Investment Guidance

Entry Zone: ₹2,500–₹2,650 range — below 200 DMA and closer to recent support levels, offering better valuation comfort.

Current Price: ₹2,802 — near 50 DMA, RSI at 46.7 and MACD negative suggest neutral-to-weak momentum.

Long-Term View

Strong candidate for long-term holding given brand strength, earnings growth, and sector tailwinds.

Monitor debt levels and valuation multiples for signs of overheating.

Would you like a comparison with Bajaj Auto or Hero MotoCorp to assess relative performance in the two-wheeler space?

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