TVS Motor company majorly deals with 2 wheelers manufacturing and has been doing extremely well recently. If you take a look at their financial results for the first two quarters of FY11, then their profits have more than doubled on a YoY basis. Their sales have also gone up by a huge margin. The reason I am suggesting a BUY here is because similar kind of performance is expected in the next two quarters of FY11 as well but that is not it. Recently the stock has been beaten down to extremely low levels. The stock got hit from 87 to 66 now, almost a 25%+ correction here for literally no reason. TVS is a good company in the two wheeler auto space and I expect the stock to bounce back sooner or later, specially around Q3 which will be a huge trigger on the upside for this stock.

TVS Motor reported sales turnover of 1616cr (+143% YoY) and net profit of 54cr (+220% YoY) in Q2 FY11. Very similar YoY growth was reported in Q1 FY11 as well. And we expect the company to continue to post the exact same growth in the coming quarters of FY11 as well. The estimated annual EPS of FY11 for TVS Motor comes anywhere between 4 – 4.5 and the current P/E of 22 suggests that the stock can easily goto levels of 90. Currently the stock is trading around 66 and the targets are almost 40% on the upside which suggests that TVS is a good buy at current levels.

BUY TVS Motor(cmp: 66) with targets of 90+ in 6-8 months.

Related posts:

1. Buy BGR Energy
2. Buy Indiabulls Financial Services
3. Buy Jindal Poly Films