Accumulate Eicher Motors; target of Rs 3800: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Eicher Motors with a target price of Rs 3800 in its research report dated November 11, 2023.

Broker Research

November 18, 2023 / 20:02 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Eicher Motors

We increase our FY24/FY25/FY26 consol. EPS estimate by 5%/4%/2% to factor in 2Q results, higher other income and management commentary. Eicher Motors’ (EIM) 2QFY24 consol. EBITDA margin at 26.4% came c90bps above BBG consensus (25.5%) and slightly below PLe (26.7%); margins expanded c80bps QoQ helped by (1) lower commodity prices, (2) price hikes, (3) inventorisation benefit. RE noted that festive season demand was good with a growth of ~15% until now and both rural and urban market performed well. On the CV side, VECV would benefit from profitable growth as peers work towards lowering discounts in the industry. Recent increase in competitive landscape has marred EIM’s near to medium term growth prospects and 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 should aid both revenue growth and margin expansion.

Outlook

Maintain ‘ACCUMULATE with a revised SoTP based TP of Rs 3,800 (previous TP at Rs. 3,730) (at 23x Sep-25E standalone EPS and 11x EV/EBITDA for VECV in line with Ashok Leyland).

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