Royal Enfield-maker Eicher Motors Ltd. shares will be in focus in trade on Thursday, May 15, after the auto player reported higher-than-expected net profit for the quarter ended March 31, 2025.
The auto player reported a net profit of Rs 1,362 crore for the fourth quarter of FY25, marking a rise of nearly 27 percent from the Rs 1,070 crore net profit reported in Q4 FY24. The firm's revenue from operations meanwhile rose 23 percent on-year to Rs 5,150 crore.
Eicher Motors is confident of accelerating growth both in India and overseas, riding on product pipeline, premiumisation trends and sustained brand-building efforts.
The company, which recently crossed the selling of one million motorcycles in a year — a tenfold jump from about 100,000 units a decade ago — is betting on the middleweight segment to fuel its expansion. It holds an 88 percent market share in this category in India and continues to double down on it with upcoming launches and refreshes lined up through the year.
“Premiumisation is continuing,” the management said in a post-earnings call, adding that marketing investments and activations are helping grow the segment. The company expects domestic momentum to remain healthy, especially with signs of a revival in urban markets thanks to income tax cuts, while rural demand continues to be strong.
Should you buy, sell, or hold shares of Eicher Motors?
"Eicher Motors maintains focus on absolute profitability growth. We expect Royal Enfield to continue outperforming peers, on strong product actions, with near-term margin pressure to be addressed once operating leverage kicks in," said Emkay Global, maintaining its target price of Rs 6,300, with a 'buy' rating.
Royal Enfield’s domestic volumes increased 24 percent YoY in Q4FY25 (versus 3 percent growth for the motorcycle segment). Nuvama Institutional Equities expects industry-beating 10 percent CAGR over FY25–27. Meanwhile, exports are likely to grow at a 17 percent CAGR.
"In all, given increased focus on key models and launch of new products, we forecast a revenue CAGR of 13 percent over FY25–27E," said the brokerage after reissuing its 'buy' rating, with an update share price target of Rs 6,200, up from Rs 6,100 earlier.
International brokerage HSBC maintained a 'hold' rating on Eicher Motors with a target price of Rs 5,300 per share. The brokerage noted that Royal Enfield is on track to achieve its highest-ever volumes in FY26, as a result of acceleration in volume growth. However, this came at the cost of operating margins. HSBC said that the current estimates and valuations already reflect the volume uptick, while any improvement in margins could act as an upside risk.
Jefferies, on the other hand, has a 'buy' call with a target of Rs 6,500 per share. It highlighted that Q4 EBITDA was in line and profit after tax beat estimates. Jefferies noted a pickup in Royal Enfield volumes since September, with the company pushing to drive demand.
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