TVS Motor shares rally 10% in 5 trading sessions. Here's why

2 min read . Updated: 28 Jun 2022, 01:55 PM IST Livemint

TVS Motor shares have surged 10% in the last five trading sessions on the BSE

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Shares of TVS Motor Company has rallied more than 10% in the last five trading sessions as compared to a 2% rise in benchmark BSE Sensex on the back of the two wheeler manufacturer's big electric vehicles (EVs) push.

TVS Motor Company aims to build a "sustained dominant play" in the electric vehicle segment by leveraging various government initiatives like production-linked incentive scheme, among others. As per its annual report for 2021-22, the company has robust plans to scale up its play in the electric segment.

Earlier this month, a Mint report suggested that TVS Motor Co. Ltd is in advanced talks to raise ₹4,000-5,000 crore from private equity firms to fund the expansion plan of the group’s newly formed electric mobility arm. TVS wants to increase the share of revenues from its EV business, capitalizing on the increasing demand for electric vehicles globally.

TVS is in advanced discussions with PE players. The money is likely to be raised in the September quarter itself, the report said, adding that the quantum of the stake will be decided depending on the valuation of the deal for TVS Electric Mobility.

The company has created a dedicated vertical for EV segment with over 600 engineers and adopted the Centres of Competency (COCs) with an agile working approach. TVS sold more than 10,000 electric vehicles during FY22, according to the company’s investor presentation. It has tied up with Tata Power and Jio-BP to set up EV charging infrastructure.

TVS Motors is doubling down on electric vehicles as India sharpens its focus on reducing vehicular pollution in cities and cutting dependence on fossil fuels amid surging fuel prices. Two-wheeler customers are also increasingly switching to electric scooters.

During the year ended March 2022, the company's overall two- and three-wheeler sales, including international business, grew by 8% at 33.10 lakh units as against 30.52 lakh units in 2020-21 fiscal.

TVS Motor manufactures 2-wheelers, starting from mopeds, to scooters, commuter motorcycles, to bikes like the Apache series and the RR310. TVS Motor shares are up over 31% in a year's period whereas the auto stock has gained about 29% in 2022 (YTD) so far.