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Consistently Outperformed the Industry: In Q2FY26, TVSL registered total volume growth of 23% YoY against the industry's 11% YoY, driven by robust demand across segments. Domestic 2W ICE sales surged 21% YoY as compared to the industry's 8% YoY, while international 2W ICE volumes grew 31% YoY versus the industry's 26% YoY, achieving the highest-ever quarterly export of over 4,00,000 units. Despite magnet supply constraint, EV 2W volumes rose 7% YoY to 80,000 units, supported by iQube crossing 7,00,000 domestic units. 3W sales posted a strong 41% YoY growth, with EV 3W market share exceeding 11%. This diversified outperformance across domestic, international; ICE and EV segments underscores the company’s superior execution and competitive strength

View and Valuation:

We revise our FY26E/FY27E EPS estimate downwards by 0.4%/0.7% and maintain our target price of INR 3,400. We continue to value the company at an unchanged PE multiple on the average FY27/28E EPS and assign a value of INR 101 to TVS Credit. We remain positive on the long-term growth prospects of TVSL; however, considering the current valuations, we maintain our “REDUCE” rating on the stock..

TVSL: Top line beats estimate, bottom line missed

* Revenue was up 29.0% YoY and up 18.1% QoQ to INR 1,19,054 Mn (vs CIE est. at INR 1,16,568 Mn) led by 22.7% YoY growth in volume and 5.1% YoY growth in ASP.

* EBITDA was up 39.7% YoY and up 19.4% QoQ to INR 15,086 Mn (vs CIE est. at INR 14,571 Mn). EBITDA margin was up 97bps YoY and up 14bps QoQ to 12.7% (vs CIE est. at 12.5%).

* PAT was up 36.7% YoY and up 16.4% QoQ to INR 9,061 Mn (vs CIE est. at INR 9,316 Mn).

Strategic Portfolio Expansion to Accelerate Sales Growth: TVSL launched four innovative products in Q2FY26, bolstering its EV and premium portfolio. The products are: 1) TVS Orbiter EV, 2) TVS King Kargo HD EV powers, 3) TVS NTORQ 150 India’s quickest hyper-sport scooter and the adventure focused 4) TVS Apache RTX, marking a bold entry into high performance and rally-tourer segments. We believe all launches have evoked exceptional market response for superior tech, quality and features poised to outpace industry growth, enrich mix and drive double-digit volume upside in H2FY26E.

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SEBI Registration no.: INZ 000160131