TVS Motor Company Adjusts Evaluation Amid Strong Growth and Debt Challenges

TVS Motor Company, a prominent player in the automobile two and three-wheelers sector, has recently undergone an adjustment in evaluation. This revision reflects a complex interplay of various financial metrics and market dynamics.
The company has demonstrated a robust long-term growth trajectory, with net sales increasing at an annual rate of 16.83% and operating profit rising by 24.55%. Over the past year, TVS Motor Company has generated a return of 9.68%, accompanied by a notable profit increase of 20.7%. The company's management efficiency is highlighted by a return on capital employed (ROCE) of 27.4, although it also faces challenges with a debt-to-EBITDA ratio of 3.10 times, indicating a lower capacity to service its debt.

Despite these challenges, TVS Motor Company has maintained a healthy cash position, with cash and cash equivalents reaching Rs 3,569.80 crore. The stock has consistently outperformed the BSE 500 index over the last three years, showcasing its resilience in a competitive market.

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