Moneycontrol Bureau
Shares of Eicher Motors fell 3 percent intraday on Monday as JP Morgan rates it negative. The brokerage has initiated coverage on Eicher Motors with an underweight rating and a target price of Rs 13000 per share.
JP Morgan says that the Royal Enfield maker’s valuations multiples may moderate as growth rate eases. It also warns that sharp reduction is seen in waiting periods as competition increases with other companies will be launching new products in lifestyle biking segment.
Meanwhile, the company has also suffered loss due to Chennai floods. Royal Enfield incurred a production loss of 11,200 units due to rains in Chennai.
“Due to a high incidence of absenteeism by our employees, and issues with the local suppliers, the company will be running at approximately 50 percent capacity this week, and plan to be back to 100 percent capacity by next week, Eicher Motors said in a filing on the BSE, last week.
The company had production loss of 7200 motorcycles due to the closure of both the company's manufacturing facilities between December 1- 6, 2015. Due to the rains, in November Eicher Motors lost production of 4000 motorcycles.
Royal Enfield sales remained strong in November, but were below expectations. Eicher Motors said it sold 40,769 units of Royal Enfield during the month, increased 48 percent compared to year-ago period. Exports increased 33 percent to 457 units in November from 344 units in same month last year.
At 12:42 hrs Eicher Motors was quoting at Rs 15,142.15, down Rs 419.65, or 2.70 percent on the BSE.
Posted by Nasrin SultanaFollow @NasrinzStory
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