Eicher Motors share price falls 4% on weak Q3 numbers; Motilal Oswal sees a 24% upside in stock
After the quarterly numbers, brokerage firm Motilal Oswal Financial Services maintained buy recommendation on the stock with a target price of Rs 25,350.
February 07, 2020 / 10:50 AM IST
Shares of Eicher Motors fell almost 4 percent in morning trade on the BSE on February 7 a day after the company had reported a 2.5 percent decline in its third-quarter standalone net profit at Rs 488.9 crore.
The number was below CNBC-TV18 estimates of Rs 500.3 crore.
The company posted a profit of Rs 501.4 crore in the year-ago period.
The revenue was up 0.7 percent at Rs 2,363.53 crore versus Rs 2,345.92 crore, YoY but earnings before interest, tax, depreciation and amortisation (EBITDA) slipped 14 percent at Rs 595.2 crore versus Rs 691.8 crore while margin was down 430 bps at 25.2 percent versus 29.5 percent, YoY.
After the quarterly numbers, brokerage firm Motilal Oswal Financial Services maintained buy recommendation on the stock with a target price of Rs 25,350, which is an upside of nearly 24 percent from the current market price of the stock.
"We do expect some volume weakness in both RE/VECV over the next 6-9 months, as the impact of BS-VI cost inflation would be fully absorbed by then. More importantly, we expect the new platform for Classic and Thunderbird Bullet to be the game-changer, driving volume recovery in the second half of FY21," Motilal Oswal said.
As per the brokerage, the stock trades at nearly 23.2 times FY21E and 18.2 times FY22E consolidated earnings per share.
Shares of Eicher Motors traded 2.59 percent down at Rs 19,888.45 at around 10:40 hours IST.Disclaimer: The views and investment tips expressed by investment experts 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.