Eicher Motors Ltd. share price target

With the recently launched Meteor-650 and Hunter 350 along with a promising product pipeline ahead, the company has an expansive product portfolio to serve the domestic and exports market. VECV volumes are also expected to remain robust as the CV upcycle continues. We maintain our BUY

Eicher Motors’ (EIM) Q4FY23 standalone EBITDA margin at 24.7% was up 80bps QoQ, driven by 120bps GM improvement on account of better sales mix, RM cost reduction and higher mix of accessories, amidst no benefit from operating leverage as scale was largely flat QoQ.

Double barrel growth of Royal Enfield and VECV

Recommendation: With the launch of Meteor 650 and Hunter 350, the company has an expansive product portfolio to serve the domestic and exports market. VECV volumes are also expected to remain robust as the CV upcycle continues. We maintain our BUY rating on the stock.

Eicher Motors’ (EIM) Q3FY23 EBITDA margin at 23.9% was up 20bps QoQ, with gross margin (GM) expanding 20bps QoQ despite this being the first full quarter witnessing sales of the newly-launched, lower-priced, model Hunter. 7% QoQ higher volumes with 1% contraction in ASP helped RE deliver 6% QoQ revenue growth and support EBITDAM in terms of operating leverage.

Q2 revenue up 5% QoQ to Rs 33bn backed by 11% volume growth (MoM run-rate of 60k units), partly offset by 7% fall in ASP