Explained: Why TVS Motor Share Price Hit New 52-Week-High Today: Buy Sell Or Hold?

TVS Motor Company is a large cap automobile company that recorded a market cap of Rs 63,661.67 Cr in Monday's closing session. The stock opened today on the NSE at Rs 1,368 apiece and went on to hit a fresh 52-week-high of Rs 1,384.80 during the afternoon deals. The stock closed on the NSE at Rs 1,339.95 apiece with an upside gap of 0.30% from the previous close of Rs 1,336.00. Following the purchase of an additional 25 percent stake in Swiss E-Mobility Group (SEMG) by the automaker's Singapore-based subsidiary for an amount of Rs 176 Cr, TVS Motor Company shares climbed 4% and reached a 52-week high on Monday during intraday trading. The latest bulk deal, which was revealed on Saturday, saw the corporation acquiring 38,217 common equity shares of SEMG for 517.36 Swiss Francs each.

"We wish to inform TVS Motor Company Limited's subsidiary, TVS Motor (Singapore) Pte Ltd, has agreed to acquire an additional 25% stake in Swiss E-Mobility Group (Holding) AG (SEMG), Switzerland by way of purchase of shares from the existing shareholders," TVS Motor said in an exchange filing.

"SEMG is currently a subsidiary of TVS Motor (Singapore) Pte Ltd and the Company and consequent to the additional acquisition, SEMG will become a wholly owned subsidiary of TVS Motor (Singapore) Pte Ltd and also the Company," the auto company further added in a statement. TVS Motor had acquired a 75% stake in SEMG through its Singapore subsidiary in 2022. SEMG will turn into a fully-owned subsidiary of TVS Motor (Singapore) Pte Ltd after the purchase of the final 25% of the stake is completed.

Commenting on the outlook of TVS Motor, Rahul Ghose, Founder & CEO - Hedged, an algorithm-powered advisory platform said "The TVS motor counter has had a healthy growth in net sales and operating profits over the long term leading to the stock outperforming in the recent past. Investors who are holding onto this counter should book one-third of their position at this level in case they are sitting on 25+% gains as the stock has entered the zone which is slightly above the fair value . For people looking to enter this counter afresh can definitely do so as the stock on the larger time frame is walking the bollinger band both for the medium as well as long term at the 1280-85 level, keeping a SL at 1235. This band also coincides with the 20 day exponential moving average of the stock."

Sonam Srivastava , smallcase manager & Founder of Wright Research said "TVS Motor Company's share price reached a 52-week high today following a 49% YoY increase in Q4 FY23 net profit, amounting to Rs 410.27 crore. Revenue also increased by 23% YoY to Rs 7,275.45 crore, further boosting investor sentiment. The stock has risen over 5% in the past week, currently priced at Rs 1,336.00 per share. Many believe the upward trend will persist. Key reasons include strong quarterly results, positive investor sentiment, increasing domestic demand for two-wheelers, and expansion plans overseas. However, potential investors should consider high valuation, rising competition in the two-wheeler segment, and raw material price fluctuations. Despite trading at a premium, the company's strong fundamentals suggest potential for future growth. It is recommended to hold the stock for now, with buying opportunities likely on dips."

For the quarter that ended in March of Q4 FY23, TVS Motor Company reported a spike in net profit of 49.5% year on year (YoY) to Rs 410.27 crore. Its revenue from operations climbed 19.4% YoY to Rs 6,605 crore. The firm sold 868,417 units in Q4 vs 856,446 units during the same quarter last year. During Q4FY23, TVS Motor recorded promoters shareholding of 50.27%, FIIs stake of 17.02%, DIIs stake of 24.39% and public stake of 8.33%.

On Saturday 10th June TVS motors had informed to the respective regularities & exchanges that TVS Motor Company Limited's subsidiary, TVS Motor (Singapore) Pte Ltd, has agreed to acquire an additional 25% stake in Swiss E-Mobility Group (Holding) AG ("SEMG"), Switzerland by way of purchase of shares from the existing shareholders. SEMG is currently a subsidiary of TVS Motor (Singapore) Pte Ltd and the Company and consequent to the additional acquisition, SEMG will become a wholly owned subsidiary of TVS Motor (Singapore) Pte Ltd and also the Company.
Let understand it in detail, in order to establish a strong presence in the e-mobility business, TVS Motor Company Limited had, through its Singapore subsidiary, TVS Motor (Singapore) Pte Ltd ("TVS Singapore"), acquired 75% stake in SEMG on 27 January 2022, by way of purchase of 114,658 shares from the existing shareholders ("Minority Shareholders") of SEMG ("Transaction"). The shareholders agreement ("SHA") executed between TVS Singapore, the Minority Shareholders and SEMG, pursuant to the Transaction, inter alia provided the Minority Shareholders with a put option right ("Put Option") to sell their balance stake of 25% amounting to 38,217 common equity shares ("Sale Shares") to TVS Singapore, in accordance with terms of the SHA.

The Minority Shareholders have exercised the Put Option on 17 May 2023 and accordingly, a share purchase agreement has been executed on 9 June 2023 between TVS Singapore and the Minority Shareholders for the sale of Sale Shares to TVS Singapore. So, it's a clearly business expansion in E-scooter product category.

Technical View

Today TC+VS motors has hit afresh all-time high level & 52 week high at 1,354.50 and closed near 1340 and 52 weeks low was 722.95. Beta is very low as compared to its sector. PE ratio is above 47 wherein sectors PE is about 59. So, it is available at under value as compared to its sector.

Buy or Hold- Those who are already these stocks 630 to 1100 range they can place a profit booking order (trailing) at 1130, (which is below to its last month's low) because there is probability that TVS stock price may take a pull back because of profit booking. And if failed to form a support at given levels may further fall 1000. Ideally 1000 its going to be psychosocial support for this now.

I think it is a profit booking level or simply trailing it at above given level. And before any fresh long positions one should wait for a dip which I likely to happened. Price is in overall Uptrend movement but has reached to its uptrend resistance trendline.
Pattern Bullish or Bearish- At weekly Timeframe it's a strong breakout of Flag & pole pattern which is considered as a very bullish pattern. According to this also price may take support near 1000- 1100 range in case of pull back.

So, its better to wait for a dip instead of buying so late in this bullish momentum (because R:R won't match) if you are trying to find swing trading opportunity too according to V.L.A. Ambala (SEBI Registered Research Analyst), Stock Market Today (SMT).