TVS Motor jumps 2% after DAM Capital raises target price by 62%

Shares of TVS Motor Company gained 2 percent to Rs 1,556 in the afternoon trade on October 11 after DAM Capital Advisors predicted that the stock will exceed Rs 3,000 in the next 12 months.

DAM Capital has raised the target price to Rs 3,051, implying an upside of 62 percent, from Rs 1,875. The domestic brokerage also reiterated its ‘buy’ call on the automobile major. In the revised target price, Rs 2,826 is derived from the core business and Rs 225 from subsidiaries.

At 1:36pm, the shares of the company were trading at Rs 1,553, higher by 1.65 percent from the previous close on the NSE.

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The analysts at the firm have attributed the rise in the target price to increasing margin territory and an improving return ratio. The note added that TVS is gradually emerging as a key export major. “Export contribution has nearly doubled in the last five years from 16 percent to 29 percent with a volume CAGR of 13.4 percent,” the brokerage pointed out.

On October 9, the company announced rolling out 150,000 units of BMW Motorrad’s 310cc series of motorcycles at its Hosur facility in Tamil Nadu.

TVS signed a strategic partnership deal with BMW in April 2013 to manufacture sub-500 CC motorcycles. The company’s Hosur plant already manufactures BMW G310R and 310GS.

Over the course of 10 years, the two companies have developed and launched five motorcycles, including the BMW G 310 R, BMW 310 GS, and BMW G310 RR, along with TVS Motor Company’s flagship motorcycle, TVS Apache RR 310.

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