TVS Motor Company Limited

Consumer Cyclical — Auto Manufacturers · NSE

₹4,095.10+₹75.10 (+1.87%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of TVS Motor Company Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

TVS Motor Company Limited, together with its subsidiaries, engages in the manufacture and sale of automotive vehicles and components, spare parts, and accessories in India and internationally.

IndustryAuto Manufacturers

SectorConsumer Cyclical

Employees6,850

Annual revenue₹47,652 Cr

How does it make money?

Turns over ₹47,652 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation. Each of its 6,850 employees supports ₹6.96 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹6.96 Cr

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TATA MOTORS LIMITED, TATA MOTORS PASS VEH LTD, MAHINDRA & MAHINDRA LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 28.8%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 31.6% against a peer median of 19.7% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE19.7%

What is the outlook?

32 analysts covering the stock expect revenue to grow about 13.0% and earnings to grow about 18.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+13.0%

Est. earnings growth+18.7%

Analysts32

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +74% while net margin moved +31% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+74%

Margin effect+31%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 3.06x is high — earnings must service borrowings before shareholders see anything
✗ Current ratio of 0.98 — short-term liabilities exceed short-term assets
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
• Interest cover of 3.2x is adequate

Quality vs. Valuation

Company Quality

67/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

42/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

56.8x

3Y Median

73.6x

40 monthly readings · mean 72.7x · range 50.8x–91.7x

Sector Median

25.2x

median of 3 sector peers

🟢Current valuation is approximately 23% below its 3y median of 73.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 125% above the peer median of 25.2x.

vs. its own history

Cheap

73.6x median over 40 months · -23%

vs. sector peers

Expensive

25.2x median of 3 peers · +125%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

26.5x

PEG

1.80

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 14.7% to 17.7% over 3 years.
Return on equity is rising
ROE has improved from 24.1% to 31.6%.
Return on capital is rising
ROCE has improved from 20.6% to 28.8%.
High return on capital employed
ROCE of 28.8% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

6 items require attention · 2 high · 4 watch

🔴High leverageFinancial
Debt/Equity of 3.06x — earnings must service borrowings before shareholders see anything.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Debt is increasingFinancial
Total debt is up 47% over 3 years.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1,368 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 111% against revenue up 74% — sales are being booked faster than they are collected.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.98 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 28.8% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 14.7% to 17.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 23% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.9x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 111% against revenue up 74%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 125% above the peer median. That premium needs a reason that persists, or it closes.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 15% a year✓ 20.2% CAGR
Latest reported year was 34.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 16%✓ 17.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.9x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹1,368 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✓ 3.2x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 1 neutral · 4 weak

Market Cap

₹1.95 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

56.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

20.34x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹72.15

Profitable

Profitable on a per-share basis

ROE

31.6%

Strong

Strong capital efficiency

ROCE

28.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

3.06x

High

High leverage

Revenue Growth (YoY)

34.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

67.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.29%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹1,368 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

35.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

13.1%

Average

Average margins

Net Margin

5.7%

Average

Average bottom-line conversion

Current Ratio

0.98

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.03

Defensive

Steadier than the market

52W Range Position

69%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

4042.2 / 4186.4

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

45.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹27,434 Cr	₹32,668 Cr	₹36,887 Cr	₹47,652 Cr	+20.2%
EBITDA	₹4,043 Cr	₹5,483 Cr	₹6,607 Cr	₹8,433 Cr	+27.8%
EBITDA Margin	14.7%	16.8%	17.9%	17.7%	—
PAT (Net Profit)	₹1,329 Cr	₹1,686 Cr	₹2,236 Cr	₹3,018 Cr	+31.5%
EPS	₹27.97	₹35.5	₹47.05	₹63.53	+31.5%
ROE	24.1%	24.9%	26.3%	31.6%	—
ROCE	20.6%	21.6%	22.6%	28.8%	—
Total Debt	₹22,376 Cr	₹26,006 Cr	₹28,609 Cr	₹32,791 Cr	+13.6%
Free Cash Flow	-₹5,746 Cr	-₹2,398 Cr	₹1,025 Cr	-₹1,368 Cr	—

🟢 Revenue has grown at 20.2% a year over 3 years.

🟢 EBITDA has grown at 27.8% a year over 3 years.

🟢 EBITDA Margin has risen from 14.7% to 17.7% over 3 years (+3.0 pts).

🟢 PAT (Net Profit) has grown at 31.5% a year over 3 years.

🟢 EPS has grown at 31.5% a year over 3 years.

🟢 ROE has risen from 24.1% to 31.6% over 3 years (+7.4 pts).

🟢 ROCE has risen from 20.6% to 28.8% over 3 years (+8.3 pts).

🔴 Total Debt has grown at 13.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹56,501 Cr

Total Liabilities

₹45,788 Cr

Cash & Equivalents

₹3,926 Cr

Operating Cash Flow

₹1,867 Cr

Capex

-₹3,235 Cr

Shareholding (proxy)

Institutional Holding

30.3%

Insider Holding

52.3%

Corporate Actions

Next Earnings

21 Oct 2026

Dividend Rate

₹12

Ex-Dividend Date

30 Mar 2026

Analyst Consensus

Recommendations

27 Buy · 4 Hold · 6 Sell

Target Price (Mean)

₹4,251.05

+3.8% vs CMP

Target Range

₹2,470 – ₹5,425

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TATA MOTORS LIMITED	37.1x	32.8%
TATA MOTORS PASS VEH LTD	—	-3.0%
MAHINDRA & MAHINDRA LTD	17.8x	19.7%

Recent News

3 mixed3 general

TVS Motor launches TVS Orbiter electric scooter in Nepal

scanx.trade, 18 Oct

TVS Motor Company Ltd. Share Price Rise Streak and analysis

Univest, 13 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

TVS Motor Company appoints Peyman Kargar as Director and CEO; shares decline

Upstox, 27 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Stocks to buy in 2026 for long term: TVS Motor, Siemens among 5 stocks that could give 10-30% return

The Economic Times, 21 Aug

TVS Motor Share Price Falls Over 4% After Company Names New CEO; What Should Investors Do?

NDTV Profit, 28 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Top 2 stocks to buy for tomorrow: PNB Housing Finance, TVS Motor Company by Chandan Taparia - Check stop-loss, targets

Livemint, 12 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingRisk

WeakFinancial Health · Valuation

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 2 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive · see Key things to watch ↑