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TVS Motor becomes more valuable than its peer Hero MotoCorp

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  • Shares of TVS Motor are up 71% so far in 2022, while Hero MotoCorp gained just 3% during the period.
  • This puts TVS Motor’s market cap at ₹51,078 crore, slightly more than Hero MotoCorp’s market cap of ₹51,069 crore.
  • TVS Motor said the festive season has started robustly and demand is expected to increase further during the season.
  • Analysts believe that TVS Motor has done well in sales and electric vehicle sales in recent years.

Chennai-based automaker TVS Motor Company has reached a milestone by becoming more valuable than its closest competitor Hero MotoCorp.

This is all thanks to a strong rally in TVS Motor shares this year – they are up 71% so far in 2022, while Hero MotoCorp’s gained just 2.4% during the period.

With this, TVS Motor’s market cap has increased to 51,078 crore, slightly more than Hero MotoCorp’s market value of 51,069 crore.

TVS expects demand to remain strong during the holiday season
Announcing September sales figures, the company said it had seen a solid start to the festive season and that demand is expected to increase further during the season.

Analysts believe TVS Motor has done well in sales in recent years, especially after venturing into the electric vehicle (EV) market.

“The last two years have been good for TVS Motor as many of their new products have been successful, and their sales in tricycles were also very strong. Also in EV, TVS has done well and is moving faster than other two companies – Hero MotoCorp and Bajaj Auto as of now,” said Piyush Parag, deputy vice president – ​​research at Sharekhan by BNP Paribas.

The boom in EV sales also contributed to TVS Motor’s growth. In September of this year, it sold 4,923 units of TVS iQube Electric against 766 units in September 2021.

On the other hand, its competitor Hero MotoCrop is late to the EV party. It launched its first electric scooter VIDA V1 only in October. The sector already has established players such as Ather Energy and Ola Electric.

In addition, it is also more vulnerable to industry-wide slowdowns. “If an industry as a whole doesn’t perform well, Hero MotoCorp will be the one that gets hit a lot as it has the largest market share in the two-wheeler space. The past two years have not been great for Hero MotoCorp since Covid-19 took place as the entry-level and executive segments have not performed well,” said Parag.

In addition to Hero MotoCorp’s woes, there were reports in March of this year that the income tax department detected counterfeit expenses at a cost of ₹1,000 crore made by the company.

TVS Motor shows overall strength despite export problems
TVS Motor has a global presence in countries such as the Middle East, Africa, Southeast Asia, the Indian Subcontinent, Latin and Central America.

However, export sales did not perform well due to the challenging economic environment around the world.

The company’s total exports fell in September 2022 with sales of 92,975 units from sales of 1.02 lakh units last year. “There is a marginal improvement in international markets, but the challenges of economic slowdown and higher inflation still persist. We are cautiously optimistic that sales momentum will continue to improve,” the company said.

Strong sales in the other segments have made up for the slower export sales of TVS Motor, which produces the widest range of two-wheelers, from mopeds to scooters and commuter motorcycles to race-inspired bicycles.

Latest sales figures September 2022 (in units) September 2021
two wheeler 3.61 lakh 3.32 lakh
Tricycle 17,282 14,645
export 92,975 1.02 lakh
EV (TVS iQube electric) 4.923 766
General 3.79 lakh 3.47 lakh

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