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Chennai-based TVS Motor Co. has become the sixth-most valued listed automobile company in the country, pipping Hero Moto for the position on Friday. Shares gained as much as 2.6 percent on Friday before cooling off. In the process, it achieved market capitalisation of Rs 51,750 crore compared to Hero's Rs 51,300 crore in intraday trading.

Since 1997, this is the first time that TVS Motor has a market capitalisation greater than Hero Moto.

What's Working For TVS?

The two-wheeler maker is narrowing the profitability gap between its peers. The company's average EBITDA per vehicle has nearly tripled over the last decade from Rs 2,300 in financial year 2010 to Rs 6,400 in the June quarter of the current financial year.

This has meant that the company's EBITDA per vehicle is only 35 percent below the peer average. The share of TVS Motors' EBITDA among its peers has increased from 6 percent in financial year 2017 to 13 percent in the previous financial year.

TVS is also narrowing the margin gap with Hero over the last five quarters. For the September quarter, TVS' margin is likely to improve 50 basis points from last quarter and 80 basis points year-on-year.

Also Read: TVS Motor gets shareholders' nod for sale of entire stake in Sundaram Holding

For the September quarter, the company's overall sales volume increased 12 percent year-on-year, while three-wheeler sales increased 7 percent from last year.

Shares of TVS Motor are currently off the day's high but have gained over 70 percent this year, ranking among the top performing stocks on the Nifty Auto index.

First Published:Oct 14, 2022 2:00 PM IST