Eicher Motors Ltd. share price target

Transition towards Moderating Growth Era;Eicher Motors (EICHER) Q2FY19 results were better than our expectations. The Company has been witnessing volume growth slowdown in the recent past on account of high base effect and moderate saturation in the premium bike market in India.

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...

Classic Case Unfolding: Eicher Motors Ltd (EIL) remains to be a dominant player in 250cc+ motorcycle category in India. Its models (RE Classic 350 and Bullet 350) are still dominating the premium motorcycle markets in India without any meaningful competition.

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...

Eicher Motors reported healthy set of numbers which were in line with our estimates. Its consolidated net revenue and net profit grew by 33.9% and 38.1% yoy respectively.

Jinesh Gandhi - Research Analyst (Jinesh@MotilalOswal.com); +91 22 3982 5416 Suneeta Kamath - Research Analyst (Suneeta.Kamath@MotilalOswal.com) | Deep Shah - Research Analyst (Deep.Shah@MotilalOswal.com) Investors are advised to refer through important disclosures made at the last page of the Research Report....