TVS Motor in focus as JP Morgan sees 19% upside, raises valuation multiple to 27x

JP Morgan believes that electrification is turning out to be a market share growth opportunity for TVS Motor and has raised the valuation multiple to 27x. The research firm estimates that the company could potentially cross 20 percent market share by the end of the decade.

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TVS Motor Company was in focus on Dalal Street in the February 23 morning as JP Morgan maintained an ‘overweight’ stance on the stock. The global research and broking firm has retained an ‘overweight’ call on the stock and raised the price to Rs 1,130 per share, indicating an upside of 19 percent from the current level.

JP Morgan believes that electrification is turning out to be a market share growth opportunity for TVS Motor and has raised the valuation multiple to 27x. The research firm estimates that the company could potentially cross 20 percent market share by the end of the decade.

According to media reports, Abu Dhabi Investment Authority (ADIA), Goldman Sachs, and Carlyle are in talks with TVS Motor to invest $300-350 million in its electric vehicle (EV) arm, potentially taking the company’s valuation to $3-3.5 billion.

TVS Motor had earlier announced plans to raise funds for its electric mobility business to unlock value and capitalise on the growing EV segment. If the deal goes through, TVS Motor would become the third listed company in India to raise funds for an EV subsidiary, after Tata Motors and Greaves Cotton.

TVS Motor recently reported a net profit of Rs 352.75 crore for the third quarter of the fiscal year 2022-23, which is a 22.5 percent increase compared to the same period in the previous year. The company’s revenue for the quarter stood at Rs 6,545 crore, a 14.7 percent increase YoY.

The board of directors also approved an interim dividend of Rs 5 per share for eligible shareholders, to be paid on or after February 9. Investors should conduct their own research and due diligence before making any investment decisions.

With agency inputs

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