Volume, margin pressures may slow down TVS performance in June quarter

Stock trading at 74% premium to Hero at valuation of 24.5x its FY23 earnings

TVS Motor surprised the Street with a sharp margin expansion in the March quarter, even as its peers in the auto sector struggled to cope with the pressure on profitability.
 
Price hikes, higher exports, an improving product mix, and cost reduction efforts led to a 246-basis-point jump in stand-alone margins helping it cross the elusive 10 per cent-mark.
 
The better-than-expected margin performance, compared to the Street’s expectation of 8.5 per cent, led to the highest single-day surge in its stock for over seven years. At close, shares had gained 14 per cent.
 
Though raw material costs were