TVS Motor gains after BofAML ups target to Rs 235

The global brokerage has raised the target price to Rs 235 on the back of strong business prospects

Shares of TVS Motor were up 5% at Rs 215 following a 'buy' rating on the stock by global brokerage BofA Merrill Lynch because of strong business prospects and at current levels valuations are attractive to its peers.

"We expect TVS Motor’s lifecycle of brands within its portfolio to increase from
historical levels (of under 3 years to 5 years) due to better execution on upcoming launches. We expect TVS Motor to break out of its historical margin band of 5.5%-6.5%, led operating leverage, better pricing, and lower sourcing costs," BofA Merrill Lynch said in research report.

The global brokerage has revised its target price by 18% to Rs 235 because of upward revision in two-wheeler volumes by 10% and expansion of margins.

The stock opened at Rs 206 and touched a high of Rs 216 so far on the BSE. Over 3.6 million shares were traded on both the stock exchanges so far