Shares of Eicher Motors, the father or mother firm of Royal Enfield bikes, raced virtually 7 per cent to hit a excessive of Rs 3,647 in an in any other case weak market,
Eicher Motors on Thursday reported a stable 48 per cent development in web revenue for the quarter ended March 2023 at Rs 906 crore when put next with to Rs 610 crore in the identical interval a yea in the past.
The firm recorded its the highest-ever income from operations; at Rs 3,804 crore, up 19.1 per cent from Rs 3,193 crore within the corresponding quarter of FY22. EBITDA was Rs 934 crore in Q4 FY23, up 23.3 per cent in comparison with Rs 757 crore in the identical quarter of the earlier monetary 12 months. Royal Enfield bought 214,685 bikes in Q4 FY23, up 17.9 per cent from 182,125 within the corresponding quarter of FY22.
“We have registered our best-ever sales performance of t 834,895 units (up by 38.4 per cent from 6,02,268 in FY 2021-22) and up from the previous best performance in 2018-19. During the year, Royal Enfield also crossed the 100,000 export shipments milestone for the first time,” said Siddhartha Lal, managing director of Eicher Motors.
The company’s board has also recommended a final dividend of Rs 37 per equity for the financial year ended March 2023. The dividend will be paid within 30 days from the date of shareholders’ approval.
What Should Investors Do Now?
The stock has gained 23 per cent since the start of this fiscal year, while the benchmark index has moved up around 5 per cent.
The stock is also traded in the futures & options segment on the NSE. As per the options data for May series, the stock has maximum build-up of positions (open interest) at the 3,600 and 3,700 Calls. Thus, indicating possible resistance in the range of Rs 3,670 – Rs 3,750.
Notable open interest in Puts is at Rs 3,300, with fresh build-up seen at Rs 3,600 and Rs 3,500. Thus, indicating possible support in the range of Rs 3,500 – Rs 3,550.
Jefferies retains a ‘Buy’ on Eicher Motors but the stock occupies a lower position in its pecking order.
The foreign brokerage pegs the price target at Rs 4,000 estimating a 17% upside from the last closing price. The target has been raised from Rs 3,800 valuing RE at 25X FY25E PE and the commercial vehicle business at 5X FY25E PB, the brokerage said.
“We continue to like Eicher as we see tailwinds of 2W demand recovery, industry premiumisation and growth in exports,” it stated in a report.
Motilal Oswal has downgraded the stock to ‘Neutral’ and placed the target price at Rs 3,650. This is a 7% upside from the previous closing price. The valuation is at 24.5X/19.3X which largely reflects the expected volume and margin recovery, but not the potential risk from the upcoming launches of BajajTriumph in mid-size motorcycles in India and global markets, it said further. “Hence, we downgrade our rating to Neutral from Buy,” Nuvama added.
Kotak recommends a ‘Sell’ ranking on Eicher Motors anticipating a extra cut-throat competitors, going forward.
“With expected launches from Bajaj-Triumph and Hero-Harley in the > 250 cc motorcycle segment, the competitive intensity is expected to increase, which may weigh on the company’s growth prospects,” the brokerage noted.
Despite the launch of Hunter 350, the demand restoration in RE’s home portfolio (ex-Hunter) remained lacklustre on account of larger upfront prices and key states continued to weigh on demand restoration.
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