Axis Securities has reiterated a BUY recommendation on TVS Motor Company with a revised target price of Rs 4,020, implying an upside potential of nearly 14% from the current market price. The brokerage believes the company is entering a powerful multi-year growth cycle driven by accelerating electric vehicle adoption, export recovery across strategic geographies, and sustained premiumization across its motorcycle and scooter portfolio. TVS Motor’s Q4FY26 performance remained broadly in line operationally, while profit growth exceeded estimates. Analysts also expect the company’s Norton Motorcycles business and EV ecosystem to become significant earnings drivers over the medium term, reinforcing margin expansion and global market positioning.

Axis Securities Reaffirms BUY Rating on TVS Motor

Axis Securities continues to maintain a bullish stance on TVS Motor Company, highlighting the company’s robust positioning in India’s rapidly evolving two-wheeler market. The brokerage has retained its BUY call while slightly revising the valuation multiple from 34x to 31x core FY28 earnings, arriving at a target price of Rs 4,020 per share.

The report underlined that TVS Motor has successfully built a balanced growth framework combining domestic market leadership, export recovery, electric mobility expansion, and premium product penetration. Analysts believe this diversified growth strategy gives the company a structural advantage over many peers in the sector.

Q4FY26 Earnings Show Strong Operational Momentum

The company reported a resilient March quarter despite macroeconomic and supply-chain uncertainties. Revenue for Q4FY26 climbed 34.1% year-on-year to Rs 12,808 crore, largely driven by higher vehicle volumes and improved realizations. EBITDA rose 26% YoY to Rs 1,679 crore, while profit after tax advanced 17.1% to Rs 998 crore, surpassing brokerage expectations.

The operational performance was supported by:

• Healthy domestic demand across premium motorcycles and scooters
• Strong export recovery in Sri Lanka and Latin America
• Improved product mix and premiumization
• Better operating leverage from higher EV scale
• Sustained cost optimization initiatives

The company’s average selling price per vehicle improved 4.5% year-on-year to Rs 82,077, reflecting the growing contribution of premium offerings.

Electric Vehicle Business Emerging as a Core Growth Engine

TVS Motor’s EV vertical continues to gain significant traction, with the brokerage identifying electric mobility as one of the company’s most important long-term growth drivers.

Management indicated that the EV division’s monthly run-rate is expected to rise from approximately 40,000 units to nearly 50,000 units in the near term. Demand for the iQube electric scooter remained strong, while the Orbiter platform continued scaling up production and market penetration.

The brokerage emphasized that the EV business is now generating positive contribution margins due to:

The report also highlighted the strategic Hyundai-TVS partnership in electric three-wheelers, which could become an important differentiator in India’s urban mobility transformation.

Export Recovery Strengthens International Positioning

Exports have emerged as another major pillar of TVS Motor’s growth narrative.

Axis Securities noted that the company continues to outperform industry growth across export markets. Recovery in Sri Lanka has remained strong, while Latin America has become a key strategic geography for the next two to three years.

Total export sales during Q4FY26 increased 24.3% year-on-year to 4.22 lakh units. Export two-wheeler sales rose 21.4%, while export three-wheeler sales surged nearly 57% YoY.

Management also stated that the company has proactively strengthened inventory planning and distributor support mechanisms to mitigate logistics disruptions and geopolitical volatility in overseas markets.

Premium Motorcycles and Scooters Driving Profitability

Premiumization remains central to TVS Motor’s margin expansion strategy.

The brokerage pointed out that premium products such as Apache, Raider, Ronin, and Jupiter continue witnessing healthy consumer traction. Management expects scooter contribution to increase from the current 38% level to more than 40% of the overall portfolio over time.

The company believes consumers are increasingly shifting toward higher-value motorcycles and feature-rich scooters, especially in urban markets where discretionary spending is improving.

Axis Securities expects this transition toward premium products to materially improve profitability over the next several quarters through:

• Higher average realizations
• Improved operating leverage
• Stronger gross margins
• Better brand positioning
• Reduced dependence on entry-level segments

Norton Motorcycles Could Become a Key Earnings Catalyst

FY27 is expected to be a critical turnaround year for Norton Motorcycles.

The brokerage stated that prior investments in the premium British motorcycle brand are now expected to begin delivering meaningful revenue contribution. TVS management believes Norton will strengthen the company’s global premium motorcycle positioning while contributing to medium-term margin accretion.

Analysts expect Norton’s expansion into developed markets to gradually elevate TVS Motor’s international brand recognition and premium pricing capabilities.

Financial Outlook Remains Robust Through FY28

Axis Securities expects TVS Motor to deliver strong earnings growth over the next two fiscal years.

The brokerage forecasts:

The brokerage further estimates that TVS Motor’s revenue, EBITDA, and PAT could grow at approximately 14%, 18%, and 25% CAGR respectively between FY26 and FY28.

Capacity Expansion and Strategic Investments Continue

TVS Motor is simultaneously investing aggressively in manufacturing, R&D, and digital capabilities.

Management plans nearly Rs 3,500 crore in capital expenditure, including:

• Rs 2,000 crore toward R&D and digital investments
• Nearly Rs 1,000 crore toward manufacturing expansion
• Capacity addition of 1.5 million units over the next 12 months

This would increase the company’s installed manufacturing capacity to approximately 8.3 million units annually.

Key Risks Investors Should Watch

Despite the constructive outlook, Axis Securities highlighted several risks that could impact estimates and valuations:

• Volatility in commodity prices, particularly steel and rare earth magnets
• Supply-side challenges in magnet availability
• Currency and macroeconomic instability in export markets
• Execution risks in EV scaling and international expansion

Investment View

Axis Securities believes TVS Motor represents a rare blend of volume growth, premiumization, EV leadership, export strength, and disciplined capital allocation.

The brokerage expects the company to continue outperforming the broader two-wheeler industry over the next 18-24 months, supported by new launches across ICE and EV categories, margin expansion initiatives, and growing global presence.

At the current market price of Rs 3,527, the revised target price of Rs 4,020 suggests a potential upside of nearly 14%, reinforcing the brokerage’s continued BUY recommendation on the stock.