We reinstate coverage with a SELL and have a target price of Rs 21,000 based on SOTP. Multiple factors are likely to impact the growth outlook at Eicher. After witnessing robust growth over CY12-FY18, when earnings grew at 46% CAGR, we believe earnings growth will moderate to 10% CAGR over FY19-21E as lifestyle segment growth normalizes in India, competition steps in and export initiatives take time to pay off.

Growth seems to be the overwhelming concern for MPC members as global and domestic slowdown bites. It has gained a pre-eminence as inflation is well within RBI's durable target of 4%. A muted global growth bodes well for domestic inflation as oil prices should remain at current levels. Global and domestic food inflation outlook is also benign. Inflation has continued to decelerate even in Jan'19. A disappointing Q3GDP and benign Feb'19...

RE's domestic volumes declined 5% yoy in Q3, led by declines in major states such as Tamil Nadu (-37%), Kerala (-24%), Gujarat (-25%), Maharashtra (-15%), Karnataka (-9%), and Andhra Pradesh (-11%). The number of states witnessing a decline has increased...

In the quarter ended December 2018, Royal Enfield's total revenue from operations rose 3% to Rs. 2,341 crore, compared to Rs. 2,269 crores in the same period last year; Operating margin (OPM) went down by 168 bps to 29.03% and the Operating profit was Rs. 679.53 crores, down by 2% compared to Rs 696.81 crores in the same period last year. The other income went up by 57% to Rs 188.60 crore, thus the PBIDT rose by 6% to Rs 868.13 crore. The Company interest cost jumped to Rs 1.88 crore and depreciation rose to Rs 76.84 crore. Thus, the PBT grew by 5% to Rs 789.41 crore. Tax expense increased by 12% to Rs 256.46 crore and Profit After Tax grew by 2% to Rs. 532.95...

Royal Enfield's (RE) Q3FY19 revenue were above our and consensus estimates mainly on account of higher realization led by ABS implementation. EBITDA margin for the quarter stood at 29% vs our and consensus estimates of 29.8% and 30% respectively. We maintain our caution view on success of 650 twins in coming time and factor in CV cycle decline in our FY21 estimates. We cut our multiple for RE biz to 18x (earlier 21x) over slower growth in coming years and 10x for VECV business (earlier 15x) on account CV cycle downturn. We revise our TP to Rs19,860 (earlier Rs23,300) and change our...

ICICI Securities Ltd | Retail Equity Research Eicher Motors reported a subdued Q3FY19 performance Consolidated revenues for Q3FY19 were at | 2,341 crore (up 3.4% YoY). ASPs for Royal Enfield (RE) were at | 1.19 lakh/unit, up 10.4% YoY while sales volumes were at 1.94 lakh units, down 5.9% YoY. ASPs were higher due to introduction of ABS in certain models EBITDA came in at | 680 crore (down 5.4% YoY) with corresponding EBITDA margins at 29.0% (down 270 bps YoY, down 126 bps QoQ)...

Although operating margins at 29% missed PLe at 29.7%, Eicher Motors' (EIM) Q3FY19 consolidated performance was on the whole slightly ahead of our expectations. However, given that most of the high volume models (350cc variants) are now readily available and there is stagnation in demand, we don't expect RE to continue to be immune to the overall domestic motorcycle demand scenario. Given the market conditions, the slump in demand caused by the cost increase (Rs21-25K/unit) given the shift to ABS is also expected to take time to recover. Additionally, on top of it, RE for the first time would...

revenue grew 3% YoY to INR23b. Adj. PAT increased 0.4% YoY (-5.9% QoQ) to INR5.3b. EBITDA margin shrank 220bp YoY (-130bp QoQ) to 29%. For 9MFY19, revenue/EBITDA/PAT grew 13.5%/10.3%/9.4% YoY. net realization improved 5.4% QoQ (+10.1% YoY) to INR121k, led by a favorable mix and a price increase for ABS/ disc brakes.

Eicher Motors Ltd.'s profit in the September-ended quarter missed analyst expectations as costlier raw material and higher employee benefits weighed on the maker of Royal Enfield motorcycles. Eicher Motors reported 7% rise in its consolidated net profit of Rs 566.28 core for the second quarter ended Sept 2018. Consolidated revenue for the quarter grew 11% at Rs 2,408.17 crore. Barring the joint venture gain, the company registered 2% growth in profits to Rs 489.11crore....

Eicher Motors Ltd Q2FY19 results Comment Revenue decreased by 5.49% to Rs. 2395.22 Cr in Q2FY19 when compared to the previous quarter. On the other hand, it grew by 10.83% when compared with Q2FY18.

Eicher Motors reported marginal muted performance in Q2FY19. Consolidated revenues for Q2FY19 came in at | 2408 crore (up 11.3% YoY). ASP's for RE in Q2FY19 stood at | 1.14 lakh/unit, up 1.3% QoQ while sales Volumes stood at 2.1 lakh units up 3.6% YoY EBITDA came in at | 729 crore (up 5.7% YoY). The EBITDA margins stood at 30.3% (down 160 bps YoY). Disappointment on margins was primarily driven by one-time expenses related to recent launched RE 650 twin in international markets....

revenue grew 11% YoY to INR24b (in-line). Adj. PAT grew 7% YoY (- 1.7% QoQ) to INR5.6b (est. In 1HFY19, revenue/EBITDA/PAT grew 19%/18%/14%, implying residual growth of 12%/15%/14% for 2H. net realization improved 1.3% QoQ (+7.3% YoY) to INR114.4k (est. of INR113.2k), led by favourable mix.

Royal Enfield's (RE) Q2FY19 results were below our and consensus estimates at operating level. EBITDA margin for the quarter stood at 30.3% vs our and consensus estimates of 31.8% and 31.5% respectively. EBITDA margin were majorly impacted by weaker operating leverage and higher other expenses. Revenue grew +11% YoY / -6% QoQ to Rs23.9bn driven by volume growth of +4% YoY / -7% QoQ to 210,102 units. Volumes were majorly impacted by recent strike in Oragadam plant. Net realization for the quarter increased +1.4% QoQ mainly on account of better product mix and recent price hikes. EBITDA for the quarter increased +7% YoY / -10% QoQ to at...

Eicher Motors' (EIM) Q2FY19 consolidated performance was broadly in-line Change in Estimates | Target | Reco (350cc variants) are now readily available and there is stagnation in demand,...

The Twins' are here: Ride it like you stole it (at a bargain) Today, Royal Enfield (RE) launched its much awaited 650cc Twins - Interceptor and Continental GT in the US market, starting at a competitive price of USD 5,799 and USD 5,999, respectively. The Twins' form the core of the RE's expansion plans in the overseas market, as much as they are relevant for offering a suitable upgrade to a large base of existing RE customers in India. At the launch event in California, RE reiterated its focus to establish itself in the middle-weight segment (250-750cc) and expand the market for middleweight motorcycles globally. The Twins' offer power-packed performance and specifications similar to some of the popular international models (in the mid-size segment) but at a much...

Eicher Motors reported healthy set of numbers which were in line with our estimates. Its consolidated net revenue and net profit grew by 27.3% and 22.4% yoy respectively. The company sold 2,25,361 units of RE in Q1FY19 up by 22% yoy. Also the performance of its JV with Volvo group (VE commercial vehicles) reported strong growth with total volumes up 40.9% yoy and improvement in profitability.

leading to a 30% rise in operating profit to Rs 809.6crore. With 23% drop in other income at Rs 59.61crore, PBIDT rose by 24% to Rs 869.2crore. Interest cost stood at a negligible Rs 1.53 crore. Depreciation charges shot up by 55% to Rs 70.15 crore. After this, profit before tax rose by 22% to Rs 797.53crore. After 246 bps rise in tax rate and 31% rise in tax provision to Rs 285.64 crore, profit after tax rose by 18% to Rs 511.89. crore....

ICICI Securities Ltd | Retail Equity Research Eicher Motors reported its Q1FY19 numbers that were above estimates on the operational front but came in below estimates at the profitability level. Revenues for Q1FY19 came in at | 2548 crore (up 27.3% YoY, 0.8% QoQ), almost in line with our estimate of | 2562 crore. Royal Enfield (RE) volumes grew strongly at 22.5% YoY to 225361 units, with VECV volumes up 41.6% to 16416 units EBITDA came in at | 810 crore (up 27.4% YoY, 12.7% QoQ) in line...

Royal Enfield's (RE) Q1FY19 results were in-line with our and consensus estimates on operating level. Revenue grew +27% YoY / +1% QoQ to Rs25.3bn driven by strong volume growth of +22% YoY / -1% QoQ to 225,361 units. Net realization for the quarter increased 1% QoQ mainly on account of better product mix. EBITDA for the quarter increased +30% YoY / +2% QoQ to at Rs8bn. Other expenses grew +31% YoY / -8% QoQ to Rs2.5bn. EBITDA margin for the quarter stood at 31.8% vs our and consensus estimates of 31.3% and 31.9% respectively. Adj. PAT for the quarter stood at Rs5.7bn (+22%YoY/-11%QoQ). Management has guided for 950k production for RE....

Eicher Motors (EIM) posted highest ever top line at ` 25.5 bn (up 27.3% YoY) in Q1FY19 supported by RE volume growth of 22.5% with favorable product mix as compared to lower base in the same period in the last year. The favorable mix due to higher sales of premium products helped in improvement at margin levels, negating the adverse impact of increasing raw material prices. EIM posted gross margin and EBITDA margin of 48.5% and 31.8% respectively during the quarter. We believe increasing share of premium bikes in the sales mix will improve the margins further going...