TVS Motor shares slip 4% in 2 days; should you buy, hold or sell this stock post Q2?

Shares of TVS Motor Company Ltd slipped as much as 1.6 per cent in Wednesday’s trade to hit the day’s low of Rs 3,497.80 on the BSE, compared with the previous close of Rs 3,555, after the two-wheeler major reported operational performance for the September quarter (Q2FY26). With this, the stock has declined 3.8 per cent in two sessions.

The Chennai-based automaker posted a 29 per cent year-on-year (YoY) rise in revenue to Rs 11,910 crore, while EBITDA surged 39.7 per cent to Rs 1,510 crore. The EBITDA margin expanded 100 basis points YoY to 12.7 per cent, driven by a favourable product mix, operating leverage, and cost-optimisation measures.

However, profit after tax (PAT) came in slightly below Street expectations at Rs 910 crore, despite a 36.7 per cent YoY growth. Brokerages Nuvama and Nirmal Bang attributed the miss to a loss on fair valuation of investment in TVS Supply Chain, which weighed on other income. JM Financial also pointed out a rise in other expenses, linked to festive spending and costs related to new product launches.

On the operational front, brokerages remained impressed. TVS Motor "consistently outperformed the industry", said Choice Institutional Equities, noting that domestic two-wheeler ICE sales jumped 21 per cent YoY, sharply outpacing the industry’s 8 per cent growth. Exports were another bright spot, with quarterly shipments surpassing 4,00,000 units — the company’s highest-ever export volume — supported by strong demand from Africa, LATAM and Asia, according to JM Financial and Nirmal Bang.

The company’s strategic portfolio expansion also stood out, with four new product launches during the quarter — the TVS Orbiter (E2W), TVS King Kargo HD EV (E3W), TVS NTORQ 150, and the TVS Apache RTX adventure tourer.

What brokerages say

JM Financial maintained its ‘Buy’ rating, hiking the target price to Rs 4,150, citing “multiple tailwinds” and expecting TVS to “continue outperforming on the volume front,” driven by premiumisation and new EV launches.

Nuvama also retained its ‘Buy’ call with a Rs 4,100 target, projecting a 15% revenue CAGR and 27% earnings CAGR over FY25–28E, saying the company is “geared up to outpace peers.”

Nirmal Bang downgraded the stock to ‘Hold’ with a target of Rs 3,589, stating that “all positives are already priced in” as it trades at 39x FY27E EPS.

Choice Institutional Equities maintained its ‘Reduce’ rating with a target of Rs 3,400, citing elevated valuations despite strong fundamentals and long-term growth potential.