Buy TVS Motors - Kotak

TVS Motors (TVSM) announced a long term co-operation agreement with BMW Motorrad. Under the said agreement, TVSM and BMW Motorrad will develop and produce new series of motorcycle in the 200cc-500cc category. Both TVSM and BMW Motorrad do not have products in the 200cc-500cc segment and the tie-up provides them an opportunity to explore this space.

For TVSM, the deal is a long term positive, with no significant impact in the near to medium term. Given current slowdown, TVSM's volumes are under pressure. Over the medium to long term though, improvement in consumer sentiment and new launches should aid volume growth for the company.

We thereby maintain our long term positive outlook on the stock with BUY rating and price target of Rs51.

Source : Equity Bulls

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