TVS Motor Co. (TVSMOTOR)

FairStock Score: 53/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Superior capital efficiency: ROE 37.76% and Piotroski F-Score 8/9 indicate strong operational health.
• Consistent growth: 5-year revenue CAGR of 17.82%, with latest quarter sales of ₹14,756 Cr and net profit of ₹891 Cr.
• Profit growth of 26.47% is outpacing sales growth of 20.44%, showing operating leverage.
• Promoter holding of 50.27% aligns management interests with minority shareholders.
• Altman Z-Score of 4.86 and current ratio of 3.34 suggest low near-term bankruptcy risk.

Concerns

• Extreme valuation: P/E 63.04, P/B 20.56, and EV/EBITDA 413.50 are far above conservative intrinsic estimates.
• Margin of safety is deeply negative at -699.62%, with Graham Number of ₹483.94 and DCF value of ₹680.61 versus price of ₹3,513.
• High leverage: Debt/Equity of 3.89 could amplify stress during an industry slowdown.
• Weak cash return to shareholders: FCF of ₹604 Cr is tiny relative to ₹1.84 lakh Cr market cap, and dividend yield is just 0.26%.

AI Analysis

TVS Motor is a high-quality franchise as measured by returns. The company earns an ROE of 37.76% and a Piotroski F-Score of 8/9, which tells me the balance sheet and operations have been very sound. Revenue has compounded at 17.82% over five years, and the latest quarter shows sales of ₹14,756 Cr and net profit of ₹891 Cr. Profit is growing 26.47%, faster than sales at 20.44%. Promoter holding of 50.27% means owners are aligned with minority shareholders. So the business side deserves respect. But Graham taught me that price is what you pay and value is what you get. Here the price has run far ahead of any conservative estimate of value. At ₹3,513, the stock trades at a P/E of 63.04 and a P/B of 20.56, while book value is only ₹170.83. The Graham Number is just ₹483.94 and DCF intrinsic value is ₹680.61. That puts the margin of safety at negative 699.62%. The EV/EBITDA of 413.50 is an extremely expensive multiple. A PEG of 2.73 confirms that even after adjusting for growth, the stock is not cheap. Financial health is mixed. The Altman Z-Score of 4.86 suggests low bankruptcy risk and the current ratio of 3.34 is comfortable. But debt/equity of 3.89 is high, and free cash flow of ₹604 Cr is tiny compared with a market cap of ₹1.84 lakh Cr. The dividend yield of 0.26% shows shareholders are waiting for growth, not income. ROCE of 15.35% is decent but not exceptional relative to the premium valuation. The FairStock Score of 48/100 reinforces my caution. This is a fast grower with excellent execution, but the market is pricing perfection. Ben Graham would wait for a better price. I would keep it on the watchlist, not chase it here.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer