TVS Motor Company (TVSL IN) – Q2FY26 Result Update – Margin expansion aided by PLI benefits – Accumulate
Published on 29 Oct 2025
TVS Motor Company reported a decent set of numbers for Q2FY26, delivering margin expansion, aided by the recognition of PLI, improved mix, price increases and cost reduction. Standalone operating revenue grew by 29.0% YoY, supported by a 5.1% increase in ASP which was broadly in-line with BBGe and 3.6% above PLe. This resulted in gross margin expanding by 50bps YoY by and 10bps QoQ even as commodity costs increased slightly. EBITDA grew by 39.7% YoY with EBITDA margins expanding by 100bps YoY to 12.7%. Normalized EBITDA margin adjusted for the PLI benefit was ~12.2% (+50bps YoY) that was partially dragged down by higher other expenses. Reported PAT grew by 36.7% YoY, missed BBGe by 4.7% (met PLe) due to a loss on fair valuation of an investment held by the company.
We expect its Revenue/EBITDA/EPS to grow at a CAGR of 15%/18%/21% over FY25-28E and retain our “ACCUMULATE” rating with a TP of Rs3,907 (including Rs 81 for TVS Credit), valuing its core business at a P/E of 45x on its Sep’27E EPS.
