Royal Enfield parent Eicher Motors shares surge 6.5% to record high post-Q3 results

Royal Enfield parent Eicher Motors shares surge 6.5% to record high post-Q3 results

• Eicher Motors shares rose 6.5% on strong Q3 profit and Royal Enfield sales.
• Company approved Rs 958 crore investment to boost Royal Enfield plant capacity
• Royal Enfield sales rose 21% in Q3, with 3,25,773 motorcycles sold

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Automaker Eicher Motors shares climbed over 6% on February 11 after reporting a bigger-than-expected quarterly profit, helped by strong domestic sales of its Royal Enfield motorcycles. Eicher Motors powered auto index 1.9% higher and was the biggest percentage gainer on the Nifty 50 index.

The firm also plans to boost capacity raised prospects of continued growth in its mainstay Royal Enfield motorcycles business.

At 10:55 am on February 11, Eicher Motors shares were trading 6.5% higher at Rs 7,767.5 apiece and looked set for their best single-day percentage gain since January 2025.

On Tuesday, Eicher Motors approved an investment of Rs 958 crore to raise capacity at a plant in Tamil Nadu, which would lift overall capacity to 2 million from 1.46 million units currently.

Analysts at UBS said the capacity boost "reinforces" its thesis that last year's GST rate cuts on most motorcycles would drive premiumisation, with Royal Enfield "emerging as a key beneficiary."

Jefferies echoed that sentiment, while noting that Royal Enfield's "toughest phase of competition as well as margin concerns are behind."

At least 12 brokerages raised their target price on Eicher after the results, lifting the median to Rs 7,500 from Rs 7,190 earlier, per data complied by LSEG.

The company's revenue rose on account of good volume growth, but an unfavourable product mix led to a fall of 2% in the average selling price at Rs 1.85 lakh, Emkay Global Financial Services said. The brokerage said its joint venture with Swedish firm Volvo Group, VE Commercial Vehicles Ltd., has also been performing well, with its outlook also turning positive. The brokerage raised its earnings per share by 4% for FY27 and 8% for FY28 on account of improvement in growth and margin performance. The brokerage maintained its 'add' recommendation and raised its target price by nearly 9% to Rs 7,500.

The management's guidance of 'growth over profitability' would mean that the margin upside is likely to be capped going forward, Motilal OSwal Financial Services said. In view of slower growth in earnings, the brokerage said the stock has no reason to be trading at high valuations.

Motilal Oswal retained its 'sell' recommendation and its target price of INR 6,313.

Eicher Motors Ltd on February 10 reported a 21.37% rise in consolidated profit after tax to Rs 1,420.61 crore in the third quarter ended December 31, 2025, driven by robust sales.

The company had posted a consolidated profit after tax of Rs 1,170.5 crore in the corresponding quarter last fiscal.

Consolidated total revenue from operations in the third quarter stood at Rs 6,114.04 crore as against Rs 4,973.12 crore in the same period last fiscal, Eicher Motors Ltd said in a regulatory filing.

Total expenses in the quarter under review were higher at Rs 4,785.69 crore as compared to Rs 3,964.59 crore in the same period a year ago, it added.

Royal Enfield recorded quarterly sales of 3,25,773 motorcycles, up 21% from 269,039 motorcycles sold in Q3 FY 2024-25.

VE Commercial Vehicles (VECV) recorded sales of 26,086 units in the third quarter, up from 21,010 units in the previous year, the company said.

"This quarter continues the steady momentum that we have built over the previous six quarters and disciplined execution across Eicher Motors, with encouraging performance from both Royal Enfield and VECV," B Govindarajan, Managing Director - Eicher Motors Ltd and Chief Executive Officer - Royal Enfield said.

Vinod Aggarwal, MD and CEO of VECV and Vice Chairman of Eicher Motors Ltd, said the third quarter was marked by a strong recovery in the Commercial Vehicle industry following a prolonged monsoon.

"GST reforms, coinciding with the traditional festive buying season, helped revive consumer sentiment and consumption-led demand for transportation," Aggarwal said, adding VECV delivered its best-ever third-quarter performance with sales of 26,086 vehicles.

On Royal Enfield capacity expansion, Govindarajan said it will "augment our annual production capacity and allow us to meet the expanding existing and projected future demand".