TVSMOTOR - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.2
| Stock Code | TVSMOTOR | Market Cap | 1,70,477 Cr. | Current Price | 3,594 ₹ | High / Low | 3,909 ₹ |
| Stock P/E | 48.6 | Book Value | 205 ₹ | Dividend Yield | 0.28 % | ROCE | 34.7 % |
| ROE | 30.6 % | Face Value | 1.00 ₹ | DMA 50 | 3,637 ₹ | DMA 200 | 3,280 ₹ |
| Chg in FII Hold | 0.19 % | Chg in DII Hold | -0.06 % | PAT Qtr | 971 Cr. | PAT Prev Qtr | 906 Cr. |
| RSI | 44.2 | MACD | -14.0 | Volume | 4,64,451 | Avg Vol 1Wk | 11,25,395 |
| Low price | 2,191 ₹ | High price | 3,909 ₹ | PEG Ratio | 1.12 | Debt to equity | 0.37 |
| 52w Index | 81.6 % | Qtr Profit Var | 57.0 % | EPS | 73.2 ₹ | Industry PE | 27.2 |
💰 Financials: TVS Motor (TVSMOTOR) demonstrates strong fundamentals with ROE at 30.6% and ROCE at 34.7%, reflecting excellent efficiency in capital usage. Debt-to-equity ratio of 0.37 is moderate and manageable. Quarterly PAT improved to ₹971 Cr. from ₹906 Cr., showing healthy growth (+57% YoY). Cash flows remain robust, supported by strong demand in two-wheelers and exports.
📊 Valuation: Current P/E of 48.6 is significantly above the industry average of 27.2, suggesting premium valuation. P/B ratio (~17.5) is high relative to book value of ₹205. PEG ratio of 1.12 indicates fair valuation relative to growth prospects. Intrinsic value analysis suggests the stock is trading at a premium, but justified by strong earnings momentum and market leadership.
🏍️ Business Model & Competitive Advantage: TVS Motor is one of India’s leading two-wheeler manufacturers with a diversified product portfolio across motorcycles, scooters, and three-wheelers. Its competitive advantage lies in strong brand recognition, innovation, and expanding global presence. Strategic partnerships and focus on electric vehicles further strengthen its long-term positioning.
📈 Entry Zone: Considering DMA 50 (₹3,637) and DMA 200 (₹3,280), accumulation is attractive in the ₹3,300–₹3,450 range. Long-term investors can hold for compounding returns, supported by strong fundamentals and sector growth.
Positive
- Strong ROE (30.6%) and ROCE (34.7%) reflect excellent efficiency.
- Quarterly PAT growth to ₹971 Cr. shows earnings momentum.
- Moderate debt-to-equity ratio (0.37) ensures financial stability.
- Strong brand recognition and diversified product portfolio.
Limitation
- High P/E (48.6) compared to industry average (27.2).
- P/B ratio (~17.5) suggests expensive valuation.
- Premium pricing limits near-term upside.
- Competition from peers in EV and global markets.
Company Negative News
- Marginal decline in DII holdings (-0.06%).
- Stock trading near upper valuation band, limiting entry opportunities.
Company Positive News
- Increase in FII holdings (+0.19%), signaling foreign investor confidence.
- Strong quarterly profit growth supports investor sentiment.
Industry
- Automobile industry P/E at 27.2 indicates TVS trades at a premium.
- Sector growth driven by rising demand for two-wheelers and EV adoption.
- Exports and global expansion provide additional growth opportunities.
Conclusion
🔑 TVS Motor is a fundamentally strong company with excellent return ratios, robust earnings growth, and a diversified product portfolio. While valuations are stretched, its leadership position and growth prospects justify long-term holding. Entry around ₹3,300–₹3,450 offers a favorable risk-reward balance for investors seeking exposure to India’s two-wheeler and EV growth story.
I can also prepare a comparative HTML snapshot against peers like Bajaj Auto and Hero MotoCorp to highlight TVS Motor’s relative valuation and efficiency.