Moneycontrol
Last Updated : Jan 07, 2019 04:08 PM IST | Source: Moneycontrol.com

Eicher Motors falls after CLSA downgrades, cuts price target by 26%

CLSA said it has retained faith in franchise but recent volume trends are concerning. Royal Enfield has witnessed a sharp deceleration in its volume growth trajectory.

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Royal Enfield Concept KX | The Royal Enfield Concept KX is a bobber styled Royal Enfield based on the company's 1938 KX. Blending in retro and modern elements, the bike also features an 838cc engine co-developed by Royal Enfield and Polaris Industries which owns Indian Motorcycles. (Image source: Royal Enfield)
Royal Enfield Concept KX | The Royal Enfield Concept KX is a bobber styled Royal Enfield based on the company's 1938 KX. Blending in retro and modern elements, the bike also features an 838cc engine co-developed by Royal Enfield and Polaris Industries which owns Indian Motorcycles. (Image source: Royal Enfield)
 
 
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Eicher Motors shares fell 1.44 percent to close at Rs 19,840 on Monday after global brokerage house CLSA downgraded its rating for the stock to outperform from buy, citing volume growth concerns.

The broker also slashed price target by 25.66 percent to Rs 22,300 from Rs 30,000 apiece after it cut FY19-21 EPS estimate by 6-13 percent.

CLSA said it has retained faith in franchise but recent volume trends are concerning. Royal Enfield has witnessed a sharp deceleration in its volume growth trajectory.

Hence, according to the broker, the stock is likely to remain under pressure until volume trajectory picks up.

The stock already corrected by more than 30 percent in last one year on volume growth concerns.

Royal Enfield's sales fell 14 percent in December 2018, the sharpest drop since June 2011 when the leisure bike brand posted 31 percent drop in domestic volumes. Sales for Royal Enfield stood at 56,026 units in December against 65,367 units clocked in the year-ago period.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
First Published on Jan 7, 2019 04:07 pm
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