Accumulate Eicher Motors; target of Rs 3520: Prabhudas Lilladher

Prabhudas Lilladher recommended Accumulate rating on Eicher Motors with a target price of Rs 3520 in its research report dated August 04, 2023.

Broker Research

August 07, 2023 / 12:01 IST

Accumulate

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Eicher Motors

We marginally trim our FY24E consol. EPS estimate by c1% to factor in 1Q results and management commentary. Eicher Motors’ (EIM) 1QFY24 consolidated EBITDA margin at 25.6% came c140bps above BBG consensus (24.2%) and in line with PLe (25.4%); margins expaned c110bps QoQ given (1) lower commodity prices, (2) price hikes, (3) inventorisation benefit, despite lower than-expected ASPs on inferior mix. RE noted that festive season demand looked good and customer spending was coming back. On the CV side, VECV would benefit from continued profitable growth in the CV industry. Recent increase in competitive landscape has marred EIM’s near to medium term growth prospects and rising competition could chip away RE’s growth volumes. However, (1) volume growth from new product launches, (2) focus on increasing export revenue mix, (3) higher mix of spares and merchandise revenue to aid both revenue growth and margin expansion.

Outlook

Maintain ‘ACCUMULATE with a revised SoTP based TP of Rs 3,520 (at 23x Mar-25E standalone EPS and 12x EV/EBITDA for VECV).

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