TVS Motor: Healthy Volume Growth: Karvy

Valuation & Rating: In view of TVSL gaining market shares, better industry outlook and healthy exports, we increase our volume estimates by 8% and 9.5% for FY15 and FY16, accordingly we increases our revenue estimates by 9% and 12% for FY15E and FY16E respectively. On account of higher margins, we raise our EPS estimates by 30% and 39% for FY15E and FY16E respectively. We increase our price target from Rs 115 to Rs 187 per share, valuing its FY16E EPS at 14x (earlier 12x). We reiterate our “BUY” recommendation on TVS Motor with potential upside of 30% from CMP.

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