TVS Motor Company is poised for significant outperformance in the two-wheeler market, driven by its strategic focus on electric vehicles, premium motorcycles, and expanding export markets, according to recent analyst reports.
Key Points
- TVS Motor is expected to outperform the domestic two-wheeler industry from FY26-FY28, supported by a strong product pipeline and market share gains in scooters, premium motorcycles, EVs, and exports.
- The company reported a 34.1 per cent year-on-year revenue increase in Q4 FY26, driven by strong volume growth and an improved product mix, with net profit rising 17.1 per cent.
- Brokerages anticipate TVS to continue gaining market share in FY27, particularly in electric two-wheelers and exports, with planned capacity expansion to 8.3 million units annually.
- TVS is a key beneficiary of India's EV transition, with strong growth momentum in e2Ws and e3Ws expected to sustain, alongside limited exposure to the weaker economy motorcycle segment.
- Export demand remains robust across Latin America, Asia, and Africa, with the upcoming launch of Norton Motorcycles in Q2 FY27 set to enhance TVS's global premium positioning.
TVS Motor Company is well placed to outperform the domestic two-wheeler (2W) industry, supported by rising market share in scooters, premium motorcycles, electric vehicles (EVs), and exports, analysts said.
The company has delivered healthy returns over the years, aided by consistent market-share gains across key domestic and export segments, along with gradual margin improvement.
Analysts expect this outperformance to continue from 2025-26 (FY26) through 2027-28 (FY28), backed by a healthy product launch pipeline.
On Thursday, the stock settled 1.5 per cent lower at Rs 3,469.2 on the BSE, against a 1 per cent rise in the benchmark Sensex.
The stock has rallied 27.2 per cent over the past year, compared with a 7.3 per cent decline in the Sensex.
Strong Financial Performance in FY26
TVS reported revenue of Rs 12,807.6 crore in the fourth quarter (January-March/Q4) of FY26, up 34.1 per cent year-on-year (Y-o-Y), driven by strong volume growth and a better product mix.
The company sold 1,560,432 units during the quarter, up 28.3 per cent Y-o-Y, while the average selling price rose to Rs 82,077.
Operationally, earnings before interest, tax, depreciation, and amortisation (Ebitda) rose 26 per cent Y-o-Y to Rs 1,679.5 crore.
Ebitda margin remained steady at 13.1 per cent despite higher commodity costs.
Net profit increased 17.1 per cent Y-o-Y to Rs 997.7 crore.
Analysts said TVS protected margins through calibrated price hikes, premiumisation, operating leverage, and efficiency gains. Management said nearly 35 per cent of the 3-5 per cent commodity cost impact had already been offset through price hikes in domestic and export markets.
Going forward, it expects cost-cutting measures, an improving product mix, and selective price increases to support profitability.
Brokerages Back Continued Market Share Gains
Brokerages expect TVS to continue gaining market share in 2026-27 (FY27), particularly in scooters, electric two-wheelers (e2Ws), and exports.
The company expects the domestic two-wheeler industry to grow at a high single-digit rate in FY27 and aims to outpace industry growth through a diversified portfolio and capacity expansion.
PL Capital said TVS continues to invest in technology, research and development, innovation, and brand building while adopting "risk-calibrated growth measures" amid geopolitical uncertainties.
The brokerage expects volume and revenue compound annual growth rates (CAGR) of 10.3 per cent and 15.4 per cent, respectively, over FY26-28, while adjusted earnings per share (EPS) CAGR is estimated at 20.4 per cent.
PL Capital retained its "accumulate" rating and revised the target price to Rs 3,950.
EVs and Premium Bikes Drive Future Growth
Management said e2Ws and electric three-wheelers (e3Ws) continue to see strong growth momentum, which is expected to sustain in FY27.
The company is targeting further market-share gains through its multi-variant EV portfolio and recent launches in e3Ws.
Emkay Global Financial Services maintained its "buy" rating with a target price of Rs 4,800, calling TVS a key beneficiary of India’s EV transition.
The brokerage also highlighted the company’s planned capacity expansion of 1.5 million units annually in FY27, taking total manufacturing capacity to 8.3 million units per annum.
TVS also has limited exposure to the economy motorcycle segment, which accounts for only around 5 per cent of total 2W volumes, shielding it from weakness in entry-level demand.
Motilal Oswal Financial Services expects TVS to deliver revenue, Ebitda, and profit after tax CAGR of 16 per cent, 19 per cent, and 21 per cent, respectively, over FY26-28.
It retained a "buy" rating with a target price of Rs 4,267.
Export Strength and Norton Launch Lift Outlook
Nomura said export demand remained strong across Latin America, Asia, and Africa despite logistical disruptions.
The brokerage expects TVS’ domestic business to grow 9 per cent and 8 per cent in FY27 and FY28, respectively, while exports were projected to grow 12 per cent annually over the same period.
Nomura also expects the launch of Norton Motorcycles in the second quarter (July-September/ Q2) of FY27 to strengthen TVS’ premium positioning globally.
However, the brokerage trimmed its FY27-28 EPS estimates by 8 per cent and 4 per cent due to commodity cost pressures and cut its target price to Rs 4,105 while maintaining a ‘buy’ rating.
Analysts cautioned that raw material inflation, supply-chain disruptions, geopolitical uncertainty, and weak rural sentiment due to below-normal rainfall remain key risks for FY27.
