TVS Motor Shares Decline Amid Slower Sales Growth and Middle East Tensions

TVS Motor Shares Decline Amid Slower Sales Growth and Rising Commodity Costs

Shares of TVS Motor Company plummeted to Rs 3,438.6 apiece on May 14, marking their lowest level in more than one week, as the firm grapples with slower sales growth and increasing commodity costs amidst Middle East tensions.

The company reported a 17.5% rise in consolidated net profit to Rs 819.55 crore in the fourth quarter ended March 31, 2026, driven by robust vehicle sales. In comparison, the company had posted a consolidated net profit of Rs 697.51 crore in the corresponding quarter of the preceding fiscal.

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Consolidated revenue from operations in the fourth quarter stood at Rs 15,052.73 crore as against Rs 11,542 crore in the year-ago period. At 2:58 pm on May 14, TVS Motor shares were trading 1.76% lower at Rs 3,465 apiece.

Brokerages were initially pleased with the earnings, but the surge in capital expenditure and rising commodity costs have tempered the enthusiasm towards the stock. BofA flagged that the margin expansion story is running into turbulence and cut its FY27 profit estimates by 5% to reflect margin pressures. It gave a "Neutral" rating to the stock and price target of Rs 3,920.

TVS Motor forecast single-digit volume growth for the current fiscal year and plans to raise prices to offset rising shipping and commodity costs from Middle East tensions. The company expects sales volumes to grow above the industry average in the single-digit percentage range for the current fiscal year, with its chief executive K. N. Radhakrishnan stating that sales volumes rose 24% in 2026.

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The Apache bike maker said near-term uncertainty stems largely from supply-side constraints rather than weak demand, with retail demand remaining robust across markets. TVS Motor's two-wheeler sales rose 27% year-on-year to about 1.35 million units in the March quarter, driven by strong domestic sales and a 23% increase in exports.

Global brokerages have issued mixed ratings for TVS Motor, with CLSA giving an "Outperform" rating and price target of Rs 3,900, while trimming TVS's volume growth ambitions. Citi has a "Sell" rating on the stock and price target of Rs 3,000, citing a deteriorating cost and capital structure.