Accumulate Eicher Motors; target of Rs 5764: Prabhudas Lilladher

Prabhudas Lilladher recommended Accumulate rating on Eicher Motors with a target price of Rs 5764 in its research report dated February 11, 2025.

Broker Research

February 11, 2025 / 11:54 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Eicher Motors

EIM consolidated revenue for Q3FY25 grew by 19% YoY, 2.3% lower than PLe/BBGe. Despite the higher mix of 350cc+ motorcycle and strong exports volume ASP remained flat. Gross profit contracted by 90bps YoY to 45.1%. EBITDA grew by 10.2% YoY while margin contracted by 194bps YoY, owing to promotional spending towards the new launches. The subdued operational performance was partially compensated by a strong growth in profits from JV, other income and lower tax rate as PAT increased by 17.5% YoY. The management indicated its retail in the overseas market has started to improve gradually outpacing the wholesale in a few of its key markets. The refreshed models of its key product like Battalion Black and other new launches have witnessed good traction in the domestic market, aiding in healthy volume growth. EIM will take further initiatives across domestic and international markets to promote the new launches which shall further aid in volume growth.

Outlook

We slightly cut our estimates (1-4%) to factor in the impact of higher promotional expenses. Assuming this, we upgrade the rating from “HOLD” to “Accumulate” with a TP of Rs5,764 (previous Rs5,332), valuing the core business at 29.5x on its Mar’27 EPS and 10x EV/EBITDA for its VECV business.

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