TVSMOTOR - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.3

📊 Core Financials Overview

Profitability

ROE of 30.6% and ROCE of 34.7% are exceptional, reflecting superior capital efficiency.

EPS of ₹61.3 and PAT of ₹779 Cr (down from ₹852 Cr) show strong earnings, with a healthy 34.9% YoY profit growth.

Operating profit for FY24 reached ₹5,543 Cr with an OPM of 14%, indicating robust margins

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Balance Sheet Strength

Debt-to-equity ratio of 0.20 — low and well-managed for a manufacturing company.

Book Value of ₹209 vs Current Price ₹3,547 → P/B ratio ~16.97, suggesting premium pricing.

Dividend Yield of 0.28% — modest, but consistent with a growth-oriented strategy.

Cash Flow & Stability

PEG ratio of 1.33 implies fair valuation relative to growth.

RSI at 72.7 and MACD strongly positive suggest short-term overbought conditions.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 57.9 Overvalued vs industry PE of 33.4

P/B Ratio ~16.97 Premium pricing

PEG Ratio 1.33 Fairly valued

Intrinsic Value ~₹3,000–₹3,200 Slightly below current price

TVS Motor appears moderately overvalued, but its growth trajectory and return metrics justify a premium.

🏍️ Business Model & Competitive Edge

Sector: TVS Motor Company Ltd is India’s third-largest two-wheeler manufacturer and a leading exporter.

Strengths

Strong R&D and innovation pipeline (e.g., electric vehicles, connected mobility)

Global footprint with manufacturing in India and Indonesia

Revenue grew from ₹24,355 Cr in FY22 to ₹39,145 Cr in FY24 — a CAGR of ~26%

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Challenges

High valuation multiples

Slight decline in quarterly PAT and DII holding (−0.93%)

TVS Motor’s consistent revenue growth, margin expansion, and global reach make it a standout in the auto sector.

📌 Entry Zone Recommendation

Suggested Entry Range: ₹3,000–₹3,200

Below 50 DMA (₹3,196) and closer to intrinsic value

RSI suggests waiting for a pullback before entry

🧭 Long-Term Holding Guidance

Hold if Already Invested: Strong fundamentals and sector leadership support long-term compounding.

Accumulate on Dips: Especially near ₹3,100 for better margin of safety.

Watchlist Triggers

EPS acceleration and EV segment growth

Institutional accumulation

Export expansion and new product launches

TVS Motor is a high-quality auto play with strong fundamentals and innovation-led growth. You can explore deeper insights on Alice Blue’s fundamental analysis or TopStockResearch’s dashboard.

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