TVS Motor becomes more valuable than its peer Hero MotoCorp

• TVS Motor shares rallied 71% in 2022 so far while Hero MotoCorp gained just 3% during the period.
• With this, TVS Motor’s market cap stands at ₹51,078 crore, a little more than Hero MotoCorp’s market value of ₹51,069 crore.
• TVS Motor said that it has seen a robust start to the festive season and the demand is expected to further accelerate during the season.
• Analysts believe TVS Motor has been doing well since the last few years in terms of sales and venturing into electric vehicle space.

Chennai-based automaker TVS Motor Company has achieved 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 have surged 71% so far in 2022, while those of Hero MotoCorp gained just 2.4% during the period.

With this, TVS Motor’s market capitalization has climbed to ₹51,078 crore, a tad more than Hero MotoCorp’s market value of ₹51,069 crore.

TVS expects demand to remain strong during festive season
While announcing its September sales numbers, the company said that it had seen a robust start to the festive season and the demand was expected to further accelerate during the season.

Analysts believe TVS Motor has been doing well since the last few years in terms of sales, especially after it ventured into the electric vehicles (EV) space.

“The last two years have been good for TVS Motor as a lot of their new products have been successful, their sales in three wheelers have also been very strong. In EV as well, 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 EV sales boom also aided TVS Motor’s growth. In September this year, it sold 4,923 units of TVS iQube Electric as against 766 units in September 2021.

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

Moreover, it is also more vulnerable to industry-wide slowdown. “If an industry as a whole does not perform well, Hero MotoCorp will be the one getting affected a lot because it has the largest market share in the two-wheeler space. The last two years have not been great for Hero MotoCorp since Covid-19 happened as the entry level and executive segment hasn’t performed well,” said Parag.

Adding to Hero MotoCorp’s woes, in March this year there were reports that the income tax department had detected bogus expenses to the tune of ₹1,000 crore made by the company.

TVS Motor shows overall strength despite export troubles
TVS Motor has global footprints in countries including the Middle East, Africa, South East Asia, the Indian subcontinent, Latin and Central America.

However, its export sales have not been doing well due to the challenging economic environment around the world.

The company's total exports fell in September 2022 with sales at 92,975 units as against sales of 1.02 lakh units last year. “On the international markets front, there is marginal improvement, however, the challenges with economic slowdown and higher inflation still persists. We are cautiously optimistic that the sales momentum will continue to improve,” said the company.

Strong sales in the other segments have managed to make up for the slower export sales for TVS Motor, which manufactures the largest range of two wheelers, starting from mopeds to scooters and commuter motorcycles to racing-inspired bikes.


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