TVS Motor Company has become the sixth most-valuable listed automobile company, with its share prices zooming 72% so far in 2022, beating the world’s largest two-wheeler maker Hero MotoCorp. Data from the BSE show that TVS Motors reached a market capitalisation of Rs 51,675 crore after its shares scaled 1.9% on Wednesday to Rs 1,087.70. The stock has surged over 100% since its March lows.
The market capitalisation of Hero MotoCorp stood at Rs 50,968 crore with its shares trading flat at Rs 2,548 and reporting a 3.77% rise year-to-date.
Maruti Suzuki India remained the country’s most-valued auto company, followed by Mahindra & Mahindra, Tata Motors, Bajaj Auto and Eicher Motors.
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Mitul Shah, head of research at Reliance Securities, told FE that TVS Motor has strongly outperformed the Nifty as well as the auto index in 2022, primarily due to strong exports and operating margins touching double-digit mark for the first time in the history of the company. Its improving brand equity has helped TVS Motor on domestic volume front, while better products have led to market share gain in overseas markets, specifically African markets. Its EBITDA margin recently touching 10% mark and potential for further margin expansion led to earnings upgrade and valuation expansion over the last two quarters, taking the market cap to new highs. Despite challenging business environment for the two-wheeler sector during past two quarters because of rural slowdown, the company has recorded healthy volumes and all-time-high quarterly profitability.
Analysts believe TVS will keep on delivering superior earnings growth compared to other two-wheeler original equipment manufacturers (OEMs) due to a combination of new models, revenue diversification as well as its commitment to electric vehicles. The demand to remain strong at least till the festive period in September-October, led by the premium segment, they said.
