Broker's call: TVS Motor (Buy)

| Updated on July 16, 2021

Emkay Global

TVS Motor (Buy)

Target: ₹730

CMP: ₹611.8

TVS Motor Company management has highlighted the company’s increased focus on electric vehicles (EVs) with a strong product pipeline and a ₹1,000 crore investment plan over the next two years (management interview). EV launches are targeted at segments such as premium scooters, high-performance sporty motorcycles, commuter space, delivery market and three-wheelers.

Creon electric scooter is expected to be launched by Mar’22. The model is likely to have advanced connectivity features, multiple driving modes, regenerative braking, parking assistant, anti-theft security, GPS navigation and geo-fencing.

TVS Motor has set up a dedicated facility for EVs, which is scalable. It is also developing an integrated vehicle architecture with a critical back-end manufacturing of battery and other critical parts managed in house. Management expects significant growth in EVs over the next 3-5 years.

It is eyeing partnerships to create an ecosystem of public charging infrastructure.

Expects positive gross margin for iQube by FY22-end: TVS currently sells its iQube electric scooter in cities such as Bengaluru, Chennai, Coimbatore, Delhi and Pune. The company is expanding its distribution and is planning to make the model available across 1,000 dealerships in major towns and cities by Mar’22. Led by higher scale, management expects positive gross margin by the end of FY22.

Published on July 17, 2021

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