TVS Motor ahead of Hero MotoCorp in terms of market capitalization

13 Oct 2022 , 07:57 AM

TVS Motor Firm surpassed Hero MotoCorp in terms of market valuation to become the sixth-largest vehicle company.

The former currently has a market capitalization of Rs 51,681 crore, while the latter has a market capitalization of Rs 50,951 crore.

TVS shares have increased by 73% this year, whereas Bajaj and Hero have increased by only 3% and 10%, respectively. There are numerous drivers for the company, even if TVS’ sales, net profit, and market share are smaller than those of Bajaj and Hero.

Among auto manufacturers, TVS has experienced the largest profit upgrades in recent months. The increases are based on predictions that, among peers, its margins will grow the greatest due to the decline in raw material prices. A more varied product mix and gains driven by premiumization are what would further help profitability.

Despite the 24 percent increase in input costs in the fiscal year 2021-2022 (FY22), the company was nevertheless able to increase its margins. The company outperformed in terms of margin thanks to careful cost control, price increases, and a bigger export share.

Given its foray into new product classes, the company’s new launches in the motorcycle and scooter segments helped it increase its market share in FY22, and the same is anticipated to happen in FY23. Its introduction into the cruiser motorcycle market was highlighted by the release of the 225cc-bike Ronin.

Last but not least, the company’s emphasis on electric vehicles, together with plans to expand manufacturing and establish a separate subsidiary, is likely to increase funding and is well received by brokerages.

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