The TVs Motor Invest Company had a market capitalization of over Rs.24,700 crore around the last week of October 2018. This company is one of the largest automobile companies in India. The company’s performance over the years has been indicative of strong and decisive management and the growth metrics of the company are some of the best in the industry. In order to understand whether it is a good idea to invest in this stock or not, we need to know the history of the company and recent performance.
History of TVs Motor Invest Company
The TVs Motor Invest Company is part of the TVS Group which is named for the founder Mr. T V Sundaram Iyengar. Though the TVS Motor company is headquartered in Chennai, Tamil Nadu, India, it had its beginnings in Delhi in the year 1911. Mr. T V Sundaram Iyengar began a bus service through his company which later expanded into the conglomerate it is today. What began as a small service now encompasses various industries and sectors which include aviation, logistics, finance, and automobiles. The first real break for the company came with the sales of the moped, TVS 50. This vehicle was created in collaboration with Clayton Dewandre Holdings which was based out of the United Kingdom. Later, TVS collaborated with Suzuki for close to two decades before starting out on its own. This was when the company was renamed from TVS-Suzuki to just TVS Motors.
As of 2018, the company is headed by Mr. Venu Srinivasan who is both Chairman and Managing Director of the company. He is assisted by Mr. Sudarshan Venu who is the Joint Managing Director. The other key people serving with the company are, Mr. K. N. Radhakrishnan who is President and Chief Executive Officer and K. Gopala Desikan who is the Chief Financial Officer for the company.
Recent Performance
The company has released its unaudited quarterly results for the first quarter of the financial year spanning 2018–2019. From this report, it can be seen that the company’s total income rose quarter-over-quarter. The total income in the final quarter of FY18 was Rs.4,016.75 crore while it was Rs.4,171.02 crore in the first quarter of FY19. Expenses of the company increased marginally quarter-over-quarter from Rs.3,824.70 crore to Rs.3,958.60 crore. Profit dropped from Rs.165.61 crore to Rs.145.61 crore. This can be partially attributed to the tax expense that rose significantly from Rs.26.44 crore in the previous quarter to Rs.65.81 crore in the current quarter. Check out here the recent stock price trends for the TVS stock.
What are the reasons that indicate that TVS Motor stock is valuable?
There are a number of reasons to indicate that investing in TVS Motors stock could be beneficial. To begin with, the company is part of the larger conglomerate, the TVS Group. Taking into account the list of companies that operate under the TVS umbrella, the TVs Motor Invest company is the largest based on size and turnover. The company manufactures in India and sells internationally which provides it with an advantage when it comes to costs involved in the production and day-to-day operations. The company manufactures both two- and three-wheelers. The company manufactures different types of two-wheelers such as motorcycles, mopeds, and scooters, making for a varied list of products that will cater to a number of segments of the Indian population. The company is well-placed to cater to the demands of the market with a number of manufacturing plants that allow scalability.
If one studies the past ten-year performance reports of the company, it can be noted that the company’s profits rose from the tens of crores a decade back to the hundreds of crores now. The company has consistently shown a growth in the cash that it holds as reserve and surplus.
The Indian motorbike market is currently focused on high-performance vehicles that deliver high speed. In order to cater to this market, the company began the Apache line of vehicles. Since space is now crowded with vehicles, in order to provide itself with an edge over the others, the company is now collaborating with BMW Motorrad. This will help TVS leverage the expertise of BMW with regard to the luxury and high-performance bike segment of which BMW is a notable player around the world.
The company has pioneered a number of new technologies in India and through such innovations, the company has received a number of awards. According to official surveys, the company has some of the highest customer satisfaction rates in the automobile industry in the country. The company has almost always led the fray when it comes to developing economical vehicles to cater to the Indian market. The TVS 50 was the first step in this direction. The mass adoption of this vehicle laid the foundation for years to come.
Conclusion
If one takes into account the number of awards that TVS Motors has received, the performance numbers that are published every quarter, and so on, TVs Motor Invest will seem like a very attractive investment. While this might be true, one should also be careful while investing. As of the last week of October 2018, the company’s stock is trading at about Rs.500 in the Indian stock exchanges. This is a lower price than what was observed in the previous months. Therefore, now may be a good time to invest in the company in order to reap higher returns in the future. Before buying stocks of the company, it would be best to study it more and through intensive study, figure out how the investment will work out for you. It may also be better to invest in the company for the long tv term instead of the short-term.
