Buy Eicher Motors; target of Rs 6100: Emkay Global Financial

BUY

Emkay Global Financial's research report on Eicher Motors

EIM reported a marginally weaker-than-expected operating performance as its renewed growth focus slightly hurt profitability. The company logged a 5% miss on our EBITDA estimate, amid lower ASP (down 2.4% QoQ) and weaker EBITDA margin at 24.2% (down by 100bps QoQ/190bps YoY). The lower ASP was driven by a poor product mix (higher share of the Bullet Battalion Black edition), while margins were impacted by higher marketing/festive spends (partially lumpy due to multiple launches in 3Q). The company has guided to sustained focus on driving volume growth over margins, even as underlying margins are seen stabilizing going ahead. We largely maintain our volume estimates – 90.4k/97.6k units/mth with 26% EBITDA margin for FY26E/FY27E.

Outlook

We upgrade FY26E/27E EPS by 4%/3%, to reflect the strong VECV earnings, and maintain BUY while revising up our TP by ~9% to Rs6,100 on the back of a higher multiple (30x Dec-26E PER vs 27x earlier) with sustained high RE volume growth momentum ahead of industry growth. We believe near-term margin pressure, will be addressed once operating leverage kicks in (as seen after the Hunter launch).

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Eicher Motors_11022025_Emkay