Tag: Eicher Motors

Eicher Motors price target seen between ₹3,400 and ₹6,000 by analysts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Eicher Motors Ltd. is seeing a classic fight between the bulls and the bears, as global brokerages mostly projected gains of up to 30% while domestic brokerages see a 27% decline in the bear case scenario.

Global brokerage firm Jefferies has maintained a ‘buy’ rating on the Eicher Motors stock. It revised upward its target price to ₹6,000 per share from ₹4,900 apiece earlier, citing good and in-line fourth-quarter earnings.

The foreign brokerage believes that investors can still buy Eicher Motors. It said two-wheelers are poised for strong growth and there is an improved long-term market share outlook for the automotive company.

Morgan Stanley has an ‘underweight’ recommendation on the counter but raised its target price to ₹3,533 per share. According to Morgan Stanley, the company’s March quarter earnings were in line at the EBITDA level. The company, similar to its peers, was positive on the financial year 2025 volume growth, the brokerage noted.

Morgan Stanley believes that Royal Enfield is moving from high growth with high margin to low growth with high margin multiples in the context of long-term growth looks expensive.

JPMorgan, which has a ‘neutral’ call, sees limited upside to the Eicher Motors stock, saying that the current price already bakes in positive market share momentum, new launches and recent export recovery. The brokerage has upped its target to ₹4,230 per share.

Domestic brokerage house Emkay Global has retained a ‘sell’ rating with a revised target price of ₹3,400 from ₹3,250 per share earlier.

For the Royal Enfield (RE) brand, Emkay said it believes growth remains a challenge with recent launches like the Himalayan 450 yet to take off meaningfully, concerns around incremental growth potential from upcoming 450cc launches, given the segment’s limited size, and replacement or upgrade demand for RE remaining elusive.

The brokerage has raised its FY26 earnings estimates by 5% on the ongoing two-wheeler recovery and consequent margin improvement.

According to Kotak Institutional Equities, the domestic demand trajectory has not witnessed any material uptick post the launch of Hunter 350. Hence, Kotak expects more than 250 cc industry growth trajectory to remain below the Street’s expectations.

The scale-up of competitors’ distribution networks will further moderate volume growth for the company, it said, adding that valuations remain expensive despite building in a recovery in export volumes and a gradual improvement in profitability.

Kotak has a ‘sell’ rating with a revised target of ₹3,400 from ₹3,100 per share earlier.

Shares of Eicher Motors Ltd. were trading with gains of a percent at ₹4,699.30 apiece on the NSE. The stock has risen 16% in 2024 so far.

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TVS Supply Chain secures contract for Eicher bus factory in Madhya Pradesh

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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TVS Supply Chain Solutions Ltd has secured a fresh contract from VE Commercial Vehicles (VECV) for overseeing their in-plant warehousing and logistics operations at the company’s Eicher bus factory in Baggad, under Dhar district of Madhya Pradesh.

VE Commercial Vehicles, a manufacturer of commercial vehicles, has been associated with TVS Supply Chain Solutions since 2006 for in-plant logistics operations at their truck plant in Pithampur, Madhya Pradesh. The recent agreement for VECV’s bus manufacturing plant spans a duration of three years, the company informed the stock exchanges in a filing.

VECV is a joint venture between the Volvo Group and Eicher Motors Limited. Established in August 2008, the company includes Eicher-branded trucks and buses, Volvo Buses, exclusive distribution rights for Volvo Trucks within India, engine manufacturing and export services for the Volvo Group, non-automotive engine operations, and the Eicher component business.

Last month, TVS Supply Chain Solutions Limited announced achieving the milestone of the assembly of 5 lakh CKD (Complete Knock-Down) kits for its client, TVS Motor Company. This milestone was reached at TVS SCS’ dedicated warehouse facility in Hosur that has an area of 1.5 lakh square feet. The facility attained its initial milestone of 1 lakh CKD kits in July 2022, thereafter consistently achieving an additional 1 lakh kits every five months.

TVS Supply Chain Solutions Limited, a leading player in the integrated supply chain solutions segment in India, is a part of TVS Mobility Group.

TVS Supply Chain Solutions Limited operates in the development of the supply chain solutions market in India. The company’s clientele spans various industries including automotive, industrial, consumer goods, technology and infrastructure, railway and utilities, and healthcare.

Shares of TVS Supply Chain Solutions Limited closed 1.51% higher, at ₹168 apiece on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Eicher Motors sells over 75,500 Royal Enfields in India in March but finds fewer buyers globally

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Eicher Motors’s Royal Enfield sales rose 5% in March 2024 at 75,551 units as compared to 72,235 units in the same month last year, the automaker said in a statement on April 1.

However, the firm’s international Royal Enfield business saw a slowdown with sales slipping 23% for the month to 9,507 against 12,351 units in March 2023.

For the full financial year 2023-24, the firm sold 9.12 lakh motorcycles, 9% more than its sale of 8.34 lakh units in the 2022-23 fiscal. Royal Enfield’s global sales, meanwhile, dipped 22% year-on-year to 77,937 in the last fiscal year.

Following the monthly business update, Eicher Motor shares were trading 1.61% lower at ₹3,954.85 on BSE at 2:30 pm.

Meanwhile, last month Eicher Motors set up a unit in the Netherlands to reduce its dependency on the UK and is in talks to establish a warehouse, potentially in Germany or France, to speed up the supply of non-motorcycle products like spare parts and branded merchandise.

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“Brexit has made it challenging to move materials to and from the UK to Europe,” Arun Gopal, Royal Enfield’s international head, was quoted as saying by Bloomberg on March 25. “Also, the UK is not geographically close to some parts of Europe, so we needed a warehouse that could service that region more effectively.”

Founded in the UK at the start of the last century and with motorcycles that were used in both World Wars, the company imports bikes and other parts into Europe from India and sells them through local distributors.

The business is growing quickly in the EU and the new warehouse will cut lead times to two weeks from 90 days currently, Gopal added.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Royal Enfield motorcycle maker sets up Dutch unit after Brexit

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The maker of Royal Enfield motorcycles has incorporated a unit in the Netherlands with plans for a warehouse in the EU, after Brexit made it more difficult to move parts to mainland Europe.

India’s Eicher Motors Ltd. set up the Dutch arm to reduce its dependency on the UK and is in talks to establish a warehouse, potentially in Germany or France, to speed up the supply of non-motorcycle products like spare parts and branded merchandise.

“Brexit has made it challenging to move materials to and from the UK to Europe,” Arun Gopal, Royal Enfield’s international head, said in an interview. “Also, the UK is not geographically close to some parts of Europe, so we needed a warehouse that could service that region more effectively.”

Founded in the UK at the start of the last century and with motorcycles that were used in both World Wars, the company imports bikes and other parts into Europe from India and sells them through local distributors.

The business is growing quickly in the EU and the new warehouse will cut lead times to two weeks from 90 days currently, Gopal added.

The company plans to start with one warehouse for non-motorcycle products and is in talks with logistics specialists in the EU to manage its range, he said. Germany and France are among prospective countries for the hub, though no decision has been reached on location yet, Gopal added.

Eicher Motors has invested €500,000 ($541,000) into the new unit, called Royal Enfield Europe BV, and will inject share capital in due course, the company said in a March 22 stock exchange statement.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

UBS upgrades Eicher Motors to buy, sees 34% upside on ‘compelling’ risk-reward

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Brokerage firm UBS upgraded Eicher Motors Ltd., renowned for its production of Royal Enfield motorcycles and other commercial vehicles, shifting its rating from “neutral” to “buy.” Alongside this upgrade, UBS has elevated the stock’s price target to ₹5,000 from its previous valuation of ₹4,300.

This revised target suggests a potential 34% increase from Tuesday’s closing rates for Eicher Motors, a significant uptick. Highlighting Eicher Motors’ potential, the brokerage firm has included the company in its prestigious “APAC Key Call” list. UBS’s rationale for upgrading

Eicher Motors stems from its assessment of the risk-reward balance as “compelling,” particularly noting Royal Enfield’s resilience against electrification risks.

Royal Enfield’s expansion plans and growth prospects

UBS foresees Royal Enfield’s forthcoming 450 cc platform launch as pivotal in addressing competitive pressures and growth uncertainties. The brokerage firm points out that the market underestimates Royal Enfield’s sustained market strength, its robust customer engagement, and the commencement of a multi-year upgrade cycle among existing customers.

According to UBS, Eicher Motors’ Royal Enfield segment is poised to witness a Compound Annual Growth Rate (CAGR) of 10% between fiscal years 2024 and 2026, outperforming the industry’s anticipated growth of 6% to 7%.

This optimistic outlook is underpinned by a projection that Eicher Motors’ Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) will grow at an 18% CAGR.

Comparative analysis and investment potential

Despite the positive outlook, shares of Eicher Motors are currently trading at a 20% discount compared to Bajaj Auto’s one-year forward price-to-earnings multiple, a notable shift from the 50% premium observed over the past five years.

Presently, Eicher Motors trades at a one-year forward price-to-earnings multiple of 23.11 times, compared to Bajaj Auto’s 28.64 times.

Shares of Eicher Motors concluded Tuesday’s trading session with a 0.8% increase and have exhibited a commendable 27% growth over the last 12 months.

In contrast, during the same period, Bajaj Auto shares surged by 127%, while Hero MotoCorp’s shares saw a 93% increase. UBS maintains its bullish stance on Eicher Motors, driven by robust domestic demand and a favourable export environment.

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Analysts expect slowing growth, competition to hit Eicher Motors in FY25; see up to 16% decline

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Leading brokerages see a potential downside of up to 16% in Eicher Motors shares from the current trading prices. The analysts at two of three brokerages believe that the slowing retail growth and rising competition could impact the Royal Enfield maker in the next fiscal.

Eicher Motors shares dropped more than 3% to a low of ₹3,729.05 apiece on BSE in morning deals on Wednesday following bearish commentary by the majority of analysts.

Eicher Motors on Tuesday announced its financial results for the third quarter of FY24, reporting a 34.4% jump in net profit at ₹996 crore on a yearly basis. The company reported highest-ever revenue from operations of ₹4,179 crore, up by 12.3% year-on-year, for the quarter under review.

After the results, Morgan Stanley assigned an ‘underweight’ rating on the stock with a target price of ₹3,209 per share, implying a potential loss of 16% from the current trading price.

The brokerage mentioned that the company posted a good set of earnings for the third quarter, which were in line with estimates. However, it noted, “The slowing growth and rising competitive pressures keep us UW.”

Nomura also assigned a ‘neutral’ rating on the stock with a target price of ₹3,769 per share, implying a potential loss of 2% in the next 12 months. The brokerage mentioned that Q3 results were in-line with estimates. Slowing retail & rising competition could impact more in FY25, the brokerage stated, adding that the success of new launches can drive up ASPs further.

The brokerage maintained FY24-26 Royal Enfield (RE) volumes at 9.19 lakh and projected an EBITDA margin at 26.4-26.9% for the period.

Jefferies, however, projected a potential upside of 27% to the stock from current trading price on the back of its lower valuations compared to its competitors like Hero MotoCorp and Bajaj Auto.

The brokerage assigned a ‘buy’ call with a target price of ₹4,900 per share. It mentioned that Q3 EBITDA and profit after tax rose by 27-34% year-on-year and were in line with estimates.

The company’s RE volumes were flattish on a quarterly basis, while EBITDA/Vehicle rose by 2% sequentially to a new high.

Jefferies stated that Eicher Motors shares have lagged the Nifty Auto Index by 35% since January 2023 largely due to competitive concerns.

While it sees the impact on the company from new launches by Harley and Triumph Motorcycles, Jefferies noted that the stock is trading at its lowest PE premium to Hero Moto and Bajaj Auto in a decade.

Eicher Motors should benefit from potential tailwinds of 2-wheeler demand recovery and premiumisation, it stated.

Eicher Motors shares rebounded from early lows to trade 1.5% higher at ₹3914.95 apiece on BSE at 9.51 am.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Royal Enfield-maker Eicher Motors records highest-ever revenue; net profit jumps 34% to ₹996 crore in Q3

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Royal Enfield motorcycle manufacturer, Eicher Motors reported on Tuesday (February 13) a 34.4% year-on-year (YoY) rise in net profit at ₹996 crore for the third quarter that ended December 31, 2023.

In the corresponding quarter last year, Eicher Motors posted a net profit of ₹741 crore, the company said in a regulatory filing. A CNBC-TV18 poll had predicted a profit of ₹964 crore for the quarter under review.

The company recorded its highest-ever revenue from operations at ₹4,179 crore, up 12.3% compared to ₹3,721 crore in the corresponding period of the preceding fiscal. The CNBC-TV18 poll had predicted revenue of ₹4,022 crore for the quarter under review.

At the operating level, EBITDA increased by 27.2% to ₹1,090.4 crore in the third quarter of this fiscal over ₹857.4 crore in the corresponding period in the previous fiscal. The CNBC-TV18 poll had predicted an EBITDA of ₹1,089 crore for the quarter under review.

#3QWithCNBCTV18 | Eicher Motors reports Q3 earnings

Net profit at ₹996 cr Vs #CNBCTV18Poll of ₹964 cr pic.twitter.com/8fz6fDwnu3

— CNBC-TV18 (@CNBCTV18Live) February 13, 2024

EBITDA margin stood at 26.1% in the reporting quarter as compared to 23% in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation. The CNBC-TV18 poll had predicted a margin of 27% for the quarter under review.

Siddhartha Lal, managing director of Eicher Motors, said, “At VE Commercials Vehicles, we recorded our best third quarter ever, with strong sales and improved market share across all business segments. We have recently announced our entry into the growing Small Commercial Vehicle segment with an Electric-First offer which will be available from 2025.”

Royal Enfield sold 229,214 motorcycles in the quarter, an increase of 4% compared to 219,898 motorcycles sold over the same period in FY 2022-23.

B Govindarajan, CEO of Royal Enfield and Wholetime Director, EML, said, “It has been a great quarter at Royal Enfield as we’ve continued on our strong growth momentum and have registered our highest ever sales for the quarter. We have further strengthened our product portfolio with the launches of the all-new Himalayan, the Shotgun 650 and new colourways on the Meteor 350.”

Vinod Aggarwal, MD and CEO of VE Commercial Vehicles said, “VECV delivered a strong performance in the quarter, with market share gains across business segments. We recorded our highest-ever Q3 sales at 20,706 units. As of December 2023, YTD sales reached 59,828 units, marking a 12.4% increase from the previous year’s 53,247 units.”

Shares of Eicher Motors Ltd ended at ₹3,890.95, up by ₹18.65, or 0.48% on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Eicher Motors gets its second downgrade in two days on valuation worries

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Two-wheeler majors Eicher Motors, Bajaj Auto, TVS Motor Company, and Hero Motocorp will be in focus in Wednesday’s trade after CLSA downgraded its ratings on three auto stocks while maintaining a ‘Outperform’ call on the fourth one. The global brokerage believes these auto stocks, except Hero MotoCorp, are now overvalued after the recent run-up in prices.

“We turn cautious as valuations are pricing in double-digit growth in volumes over the next few years, which think is unlikely,” said CLSA’s analysts in a client note.

Shares of Eicher Motors dipped 3% in two days after being hit by second analyst downgrade. CLSA has downgraded the counter to ‘Sell’ with a target price of ₹3,716 from ₹4,129 a share earlier. At 10 am, the scrip was trading 1% lower at ₹3,754.20.

The foreign brokerage expects new competitors Harley and Triumph to gain market share from Eicher’s Royal Enfield.

Cautious Outlook

Bajaj Auto, which was the second best Nifty performer last year, has also received a downgrade rating from CLSA. The broking firm now has a ‘Sell’ rating on the stock with a target price of ₹6,315 per share, against January 16 close of ₹7,300.

CLSA has slashed its FY24 and FY25 CL volume assumptions by 4.7% and 6.3%, respectively.

TVS Motor Company now has a ‘Sell’ rating with a target price of ₹1,438, suggesting a 30% downside potential from the current market levels. CLSA has decreased its FY24 and FY25 CL volume estimates by 2.0 and 4.1%, respectively.

On the flipside, analysts at CLSA have maintained their ‘Outperform’ rating on Hero Motocorp with a higher target of ₹4,964 from ₹4,127 earlier. The brokerage has increased its volume estimates in premium motorcycle and electric scooter segments.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Eicher Motors shares fall after Morgan Stanley projects 16% downside, expects growth to slow down

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Global brokerage Morgan Stanley on Tuesday downgraded the Eicher Motors stock to ‘Underweight’ from ‘Equal-weight’ earlier, citing market share and margin challenges, and high valuations. The brokerage has also trimmed its target price to ₹3,209 from ₹3,552 per share, implying a further downside of 17% from Monday’s closing levels.

Highlighting a couple of reasons behind the downgrade, analysts at Morgan Stanley expect growth and market share challenges, limited margin upside and high valuations.

Eicher’s Royal Enfield is facing rising competitive pressures in the market. Not Just Bajaj Auto or Harley Davidson, Hero Motocorp’s recent entry in the 440cc segment with the newly-launched Maverick will also pose challenges.

Eicher Motors has recently been served demand notices of over ₹130 crore from three different authorities over issues related to GST. The company has received a demand order for an aggregate amount of ₹129.79 crore, including a penalty of ₹11.8 crore and applicable interest from the office of the Principal Commissioner of CGST and Central Excise, Chennai, Eicher Motors said.

The officer has disallowed certain GST credit and raised GST demand, largely on account of the difference in GST credit mismatch between the company’s GST availment and details reported by suppliers in their GST returns.

Eicher Motors has an average stock target price of ₹3,947, according to data from Trendlyne. The consensus estimate represents an upside of 3.74% from the last price of ₹3,804.80.

Shares of Eicher Motors are trading 0.58% lower at ₹3,809.75 and are still 9% below its 52-week high price of ₹4,201.7, hit on December 4, 2023. The stock has rallied over 21% in the last one year but has fallen nearly 6% so far in 2024.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Auto analyst Jay Kale bets on these two stocks

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Jay Kale, Senior VP-Research at Elara Capital told CNBC-TV18 that he prefers TVS Motor Company over Eicher Motors in the two-wheeler space and Maruti Suzuki in the passenger vehicle (PV) segment.

Kale pointed to TVS Motor’s encouraging VAHAN retail growth numbers for December. According to him, these figures not only reflect positively on TVS Motor Company but also signal a boost for the entire industry.

He also talked about the challenges faced by Royal Enfield in December, predicting potential tests ahead as competition intensifies with the ramping up of capacities in this segment.

Also Read | Royal Enfield’s new Himalayan 450 may double volumes, says UBS but Nomura disagrees

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In the passenger vehicle space, Kale pointed to the strong growth in the SUVs segment for Maruti Suzuki, and the potential upswing in the entry-level car segment, which could further support their volume market share.

While currently, the revenue market share exceeds volume market share, Kale is confident the entry-level segment’s stabilisation would provide additional support to volume share.

TVS Motor stock has gained close to 49% in the past six months. However, year to date it has declined around 3.5%. Shares of Maruti have also had muted year to date performance, declining a little over a percent, and six-month gains at around 5%.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow