The company’s revenue rose 17.33% YoY to Rs 3,986.37 crore during the quarter.
On a sequential basis, Eicher’s PAT improved by 1.4% and revenue by 4.78%. The automaker’s consolidated margin came in at 25.6% and was higher than the estimate of 24.5%.
Eicher said this is the best-ever Q1 performance for the company, and also the fourth consecutive quarter of highest-ever revenue from operations and PAT.
During the quarter, Royal Enfield sold 225,368 units, an increase of 21.1% from 186,032 motorcycles sold over the same period in FY 2022-23.
Should you buy, sell or hold Eicher Motors’ stock? Here’s what analysts say:
HDFC SecuritiesHDFC Securities reiterated its ‘Reduce’ rating on Eicher Motors with a revised target price of Rs 3,207 (Earlier: Rs 3,086)
“Eicher’s Q1 PAT was ahead of estimates due to higher-than-expected other income at RE and strong performance at VECV even as standalone EBITDA was in line with estimates. Given the competitive aggression, we believe that RE would be forced to reconsider its pricing/brand strategy very quickly, which will in turn drive margin pressure. Even exports momentum is now derailed given the geopolitical challenges at least in the near term,” it said.
Emkay
Brokerage firm Emkay retained its ‘Buy’ rating on Eicher Motors with a target price of Rs 4,000.
“Despite recent concerns around aggressive competitive launches, we believe Royal Enfield’s (RE) robust positioning and strong upcoming product pipeline would help sustain the structural domestic franchise revival story. This, along with ramp-up in exports, better mix and softer commodities, would drive ~21% FY23-26E EPS CAGR,” Emkay said.
Nuvama
Nuvama maintained its ‘Buy’ call on Eicher Motors with a target price of Rs 3,870 (Earlier: Rs 3,660).
“We expect a revenue CAGR of 11% over FY23–25E driven by new products and network expansion. Recent launches such as Hunter 350cc and Meteor 650cc along with the upcoming line-up have the potential to rev up growth in the face of higher competitive intensity,” Nuvama said.
JM Financial
JM Financial maintained its ‘Buy’ call on the stock with a target price of Rs 3,750.
“Recent price hike (during 2Q), softening RM prices and cost control initiatives are expected to support the margins in near-term. We remain watchful on how competition pans out over the few quarters,” JM Financial said.
Prabhudas Lilladher
Brokerage firm Prabhudas Lilladher maintained an ‘Accumulate’ rating on Eicher Motors with a target price of Rs 3,520.
“Recent increase in competitive landscape has marred EIM’s near to medium term growth prospects and rising competition could chip away RE’s growth volumes. However, volume growth from new product launches, focus on increasing export revenue mix, higher mix of spares and merchandise revenue to aid both revenue growth and margin expansion,” it said.
InCred Equities
InCred Equities maintained a ‘Reduce’ rating on Eicher Motors with a target price of Rs 3,053.
“While we were anticipating new launches from Triumph and Harley this year, the aggressive pricing (15% below estimate) surprised us, which can attract customer attention and limit RE pricing power and impact demand. Hence, we lower RE target multiple to 12 x EV/EBITDA, from 14x earlier, to capture the changing competitive dynamics, leading to a lower sum-of-the-parts or SOTP-based target price of Rs 3,053 (Rs 3,082 earlier), it said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)