It is a tale of two bike stocks! TVS Motor has significantly outperformed its bigger competitor Hero MotoCorp in the last many years. TVS Motor has done quite well in various aspects compared to Hero MotoCorp.

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TVS has reported very strong earnings in the fourth quarter of 2023 financial year ended March 2023. The net profit was up 49 at Rs 410 crore whereas Hero MotoCorp reported a 37 percent rise in net profit to Rs 859 crore.

In 2023, the TVS Motor stock is up 13 percent while Hero MotoCorp is down 8 percent. However, if you look at the last three years starting May 2020, there is a significant outperformance that TVS has seen. TVS stock has gone up 3.5x, while Hero MotoCorp is up just 0.2x.

On the three year revenue CAGR, TVS Motor has grown by 17 percent compared to just 5 percent for Hero MotoCorp.

In terms of market cap over the last two years too, TVS Motor outpaced Hero MotoCorp.

If you look at the market share trends, then TVS has taken a substantial portion of the pie in both motorcycle and scooter segments while Hero MotoCorp has seen a fall.

What worked for TVS Motor

TVS Motor has had a very strong R&D. They have invested a lot in some of their new products and have consistently delivered new launches in both the scooter and the motorcycle segment. They have identified and tapped product gaps very well, with vehicles such as Raider 125cc, Jupiter and Ntorq in scooter 125cc and TVS Ronin in the 200-250 cc motorcycle segment.

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On the other hand, for Hero MotoCorp, rural markets have slowed down in a big way. Hero has also been a late entrant in exports, scooters and electric vehicles and has failed to make inroads. Also, as Honda makes its entry in the mass market segment, Hero is set to lose market share there as well.

(Edited by : Pradeep John)