Eicher Motors Ltd. share price target

Recommendation: We maintain our BUY rating on the stock.

Eicher Motors’ (EIM) Q1FY24 standalone EBITDAM at 26% was up 130bps QoQ, led by a combination of price hikes, limited marketing spending and operating leverage. RE volume was up 4% QoQ at ~228k units and ASP was lower by ~INR 4k QoQ at ~INR 171k due to ~400bps higher Hunter350 mix.

We hosted Eicher Motors’ (EIM) management for our Annual Investor Conference in Singapore (May 22-23, 2023) and following are the key takeaways: 1) EIM is confident on the sustenance of India 2W premiumisation, pushing up 125cc+ category to ~25%+ of domestic motorcycles in years to come.

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.