TVS Motor Company Ltd (TVSM) Latest Q4 FY2025 Results – Deep Dive: Volumes, Margins & Long-Term Projections

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1. Latest Q4 FY 2025 Results Highlights

• Sales Volume: 1.216 million units in Q4 FY 25, up ~14% y-o-y (1.063 million in Q4 FY 24).
• Revenue from Operations: ₹ 9,550 Cr (+17% y-o-y; ₹ 8,169 Cr) ​
• Operating EBITDA: ₹ 1,333 Cr (14.0% margin). Ex-PLI EBITDA margin at 12.5% vs. 11.3% in Q4 FY 24 ​
• Profit Before Tax: ₹ 1,112 Cr (+66% y-o-y; ₹ 672 Cr) ​
• Profit After Tax: ₹ 852 Cr (+76% y-o-y; ₹ 485 Cr) ​
• Other Income: Includes ₹ 100 Cr dividend from subsidiaries and ₹ 89 Cr fair-value loss on investments ​
• Capex: ~₹ 1,300 Cr for FY 25 ​

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2. Key Metrics & Ratios (Standalone, Q4 FY 25)

Metric	Q4 FY 25	Q4 FY 24
Sales Growth (y-o-y)	17%	–
Operating Margin	14.0%	11.3%
Net Profit Margin	8.9%	5.9%
ROCE	19.4%	–
ROE	28.9%	–
EPS (Basic & Diluted)	₹ 17.94	₹ 10.22
Net Debt / Equity	0.15×	0.13×
Debt Service Coverage Ratio	7.13×	5.18×
Interest Service Coverage Ratio	37.22×	25.15×
Credit Rating (Borrowings)	AA+ (Stable)	AA+ (Stable) ​

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3. Management Updates & Future Growth Plans

• Product Pipeline
  • ICE: New RXD4 engine variants, TVS Raider iGO, Apache RTR 160 4V USD.
  • EV: Expanded iQube line (2.2 kWh, 3.4 kWh, 5.1 kWh batteries) across key markets; King EV Max (179 km range, 2h15m fast-charge, SmartXonnect) launched.
  • Premium: Continued global roll-out of Norton Motorcycles (fresh models in ’25–’27).
• Geographical Expansions
  • Exports: Sharpened focus on LatAm (including Brazil), North Africa (Morocco), Southeast Asia; Africa market share momentum.
  • Strategic JV: Micro-mobility tie-up with Hyundai at Bharat Mobility Global Expo.
• Aftermarket & Financial Services
  • TVS Credit: Book size ₹ 27,190 Cr (+7% y-o-y); PBT ₹ 321 Cr (+40%) with 3 million new customers ​.
  • Diversification into used-vehicle loans and unsecured lending via data analytics.

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4. CAPEX & Growth Strategy

• FY 25 Capex: ₹ 1,300 Cr focused on capacity expansion, R&D (software/EV), digitalization and global footprint.
• PLI: Full-year Production-Linked Incentive (PLI) benefit recognized in Q4, to accrue quarterly from FY 26 onward.
• Cost Efficiency: Sustained commodity cost management and product-mix optimization underpin margin expansion.

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5. Long-Term Financial Projections & Expected Returns

(Illustrative Estimates)

Horizon	Revenue CAGR	EBITDA Margin	ROE	Target Price Band*	Expected Returns p.a.
5 Years (2030)	12–14%	13–14%	25–28%	₹ 3,600–3,900	8–12%
10 Years (2035)	10–12%	13–15%	26–30%	₹ 4,800–5,500	9–13%
15 Years (2040)	8–10%	14–16%	27–32%	₹ 6,500–7,500	10–14%
20 Years (2045)	7–9%	15–17%	28–33%	₹ 8,500–10,000	11–15%

*Assumes steady market leadership in India, EV ramp-up, global mix tilt, and valuation multiple of 30–35× FY30 EPS.

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6. Valuation

• Current P/E: ~60.1× ​
• Target P/E: 30–35× 5-Year Forward EPS (reflecting earnings scale-up and margin improvement)
• DCF Outlook: Terminal growth 5%, WACC ~10% → Implied fair value ≈₹ 3,800–4,200.

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7. Dividend & Shareholder Returns

• Interim Dividend: ₹ 10 per share (1,000%) paid Mar 26, 2025 ​
• Dividend Yield: ~0.36% ​
• Buyback: None announced.

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8. Credit Agency Ratings

• Bank Borrowings: AA+ (Stable) by CARE; no change in rating ​.

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9. Risks & Sensitivities

• Regulatory: OBD 2B norm cost pass-through and price hikes.
• Commodity: Volatile input costs (steel, plastics, lithium).
• FX: Rupee depreciation affecting export realizations.
• Execution: EV charging infrastructure roll-out pace.

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Disclaimer
This report is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.