TVS Motor premiumisation, EV scale and Norton launches underpin Emkay’s long-term growth outlook

Investment View and Earnings Outlook

In its August 18, 2026 company update, Emkay Global Financial Services reiterates a BUY recommendation on TVS Motor. The broker’s positive view is supported by the company’s execution across premiumisation, electric vehicles, commercial mobility, sustainability and global expansion.

Emkay expects TVS Motor’s ability to anticipate consumer preferences, incubate new categories and expand its EV ecosystem to support sustained market-share gains. The broker forecasts FY26-29E volume, revenue, EBITDA and adjusted PAT CAGR of 14 per cent, 19 per cent, 22 per cent and 26 per cent, respectively.

FY26 Operating Performance

TVS Motor reported what management considers its strongest year on record in FY26, selling 5.9mn units and becoming the world’s third-largest two-wheeler manufacturer, compared with fifth in FY21. The report notes that TVS Motor ranked number two in FY27TD and number one in July 2026.

Management supported its strategy with R&D expenditure of Rs12.5bn, equivalent to 2.7 per cent of FY26 revenue, and brand investment of 4 per cent of revenue.

Premiumisation and Norton Expansion

Premiumisation is the central strategic pillar for TVS Motor. The company is expanding its premium offering across Apache, Ronin and RR310 motorcycles, Ntorq and Jupiter scooters, as well as through its BMW Motorrad partnership. About 47 per cent of FY26 motorcycle sales came from the premium segment, the highest proportion among peers according to Emkay.

Recent launches include the Apache RTX 300 adventure rally-tourer, Apache 20th Anniversary Limited Editions and NTORQ 150. Norton is the next major premiumisation lever, with the FY27 pipeline including Manx, Manx R, Atlas and Atlas GT, alongside a planned entry into the US market.

TVS Motor invested more than GBP250mn, or approximately Rs26bn, in Norton during FY21-26. This was equivalent to roughly 23 per cent of cumulative standalone PAT over the six-year period. Emkay views Norton as entering its monetisation phase after this patient capital deployment.

Electric Vehicles and Commercial Mobility

Electric vehicles are the second structural growth driver. FY26 EV sales reached 0.37mn units, up 33 per cent year on year, supported by refreshed iQube variants, Orbiter and the Orbiter V1 Battery-as-a-Service model. TVS Motor had more than 1,000 EV dealers and around 5,000 charging points.

Retail sales of approximately 0.39mn EV units, including electric two-wheelers and three-wheelers, represented around 24 per cent E-2W market share and around 11 per cent E-3W market share. The company has partnered with HMIL to co-develop next-generation E-3Ws.

Commercial mobility also expanded, with about 219,000 three-wheelers sold. The TVS King Kargo HD EV and CNG variant are targeting urban logistics. Exports rose about 49 per cent as currencies stabilised in Africa and Sri Lanka.

Earnings Estimates

Emkay has kept its FY27E, FY28E and FY29E estimates largely unchanged.

TVS Credit Services is an additional growth platform. It recorded FY22-26 revenue and PAT CAGR of 27 per cent and 66 per cent, respectively.

Valuation and Target Price

Emkay maintains its target price of Rs5,300, implying 21.6 per cent upside from the report CMP of Rs4,357. The valuation comprises the following components:

• Core business: 35 times June 2028E core PAT, contributing Rs4,876 per share.
• TVS Credit Services: 2 times FY28 price-to-book, contributing Rs426 per share.
• Cash reserves: Rs17 per share.

The resulting rounded target price is Rs5,300. The report notes the chairman’s description of the outlook as unpredictable, complex and exciting, while management emphasises measured optimism.