TVSMOTOR - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.2
| Stock Code | TVSMOTOR | Market Cap | 1,77,108 Cr. | Current Price | 3,726 ₹ | High / Low | 3,909 ₹ |
| Stock P/E | 50.5 | Book Value | 205 ₹ | Dividend Yield | 0.27 % | ROCE | 34.7 % |
| ROE | 30.6 % | Face Value | 1.00 ₹ | DMA 50 | 3,644 ₹ | DMA 200 | 3,293 ₹ |
| Chg in FII Hold | 0.19 % | Chg in DII Hold | -0.06 % | PAT Qtr | 971 Cr. | PAT Prev Qtr | 906 Cr. |
| RSI | 54.8 | MACD | -0.39 | Volume | 8,96,617 | Avg Vol 1Wk | 8,09,710 |
| Low price | 2,191 ₹ | High price | 3,909 ₹ | PEG Ratio | 1.16 | Debt to equity | 0.37 |
| 52w Index | 89.4 % | Qtr Profit Var | 57.0 % | EPS | 73.2 ₹ | Industry PE | 30.0 |
📊 Analysis: TVSMOTOR demonstrates strong fundamentals with ROE at 30.6% and ROCE at 34.7%, indicating excellent capital efficiency. EPS of 73.2 ₹ supports earnings strength. The P/E of 50.5 is higher than the industry average of 30.0, suggesting premium valuation, but the PEG ratio of 1.16 indicates growth is reasonably priced. Dividend yield of 0.27% is modest. Technical support lies around 3,300–3,600 ₹ (DMA 200 & 50), with resistance near 3,900–4,000 ₹. The ideal entry zone is 3,300–3,600 ₹ for margin of safety. For existing holders, a long-term horizon of 3–5 years is favorable, with partial profit booking near 3,900–4,000 ₹ resistance if valuations stretch.
✅ Positive
- Strong ROE (30.6%) and ROCE (34.7%) support long-term compounding.
- EPS of 73.2 ₹ reflects robust profitability.
- Quarterly PAT growth (971 Cr. vs 906 Cr.) shows earnings momentum.
- FII holdings increased by 0.19%, showing foreign investor confidence.
- Debt-to-equity ratio of 0.37 indicates manageable leverage.
⚠️ Limitation
- High P/E (50.5) compared to industry average (30.0).
- Dividend yield of 0.27% is modest.
- DII holdings decreased by -0.06%, showing reduced domestic confidence.
- Stock trading near 52-week high (89.4% of range), limiting upside potential.
📉 Company Negative News
- MACD at -0.39 indicates neutral-to-bearish short-term momentum.
- Premium valuation may cap near-term upside.
📈 Company Positive News
- Quarterly profit variation (+57.0%) highlights strong earnings growth.
- Strong fundamentals with double-digit ROE and ROCE.
- Foreign institutional investors increasing stake.
🏭 Industry
- Automobile sector benefits from rising demand in two-wheelers and EV adoption.
- Industry P/E at 30.0 suggests TVSMOTOR trades at a premium.
- Structural drivers: urban mobility, electrification, and export growth.
🔎 Conclusion
TVSMOTOR earns a rating of 4.2 due to strong ROE/ROCE, robust EPS, and earnings growth, though valuations are premium. Long-term investors can consider entry in the 3,300–3,600 ₹ zone for margin of safety. Current holders should maintain a 3–5 year horizon, with partial profit booking near 3,900–4,000 ₹ resistance. The stock remains a strong candidate for long-term compounding in the automobile sector.