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Eicher revs up to 52-week high on record Q1 sales: Should you hitch a ride?

Eicher Motors Q1: The company reported 72 percent growth in its consolidated revenues at Rs 3,397 crore, up from Rs 1,974 crore in the same quarter of the previous fiscal year

August 11, 2022 / 11:58 AM IST
Eicher Motors

Eicher Motors

 
 
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Shares of Eicher Motors advanced over 3 percent in early trade on August 11 to hit a 52-week high of Rs Rs 3,260.85 apiece, after the company announced its June quarter earnings.

Eicher Motors Ltd on August 10 reported a consolidated profit after tax (PAT) of Rs 610.66 crore for the quarter ended June 2022, up 157.5 percent year-on-year from Rs 237 crore in the same quarter of the previous fiscal year. On a sequential basis, the profit was flat against Rs 610 crore reported in the January-March quarter of FY22.

The maker of iconic Royal Enfield reported a YoY growth of 72 percent in its consolidated revenues at Rs 3,397 crore, up from Rs 1,974 crore. Sequentially, the revenue rose 6.4 percent from Rs 3,193 crore in the March quarter.

The YoY growth was driven by an increase in the exports segment, a rise in volumes of Royal Enfield and a higher average realisation due to the price hike effected by the company during the month of May 2022, the company said.

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Here is what brokerages have to say about stock and the company post June quarter earnings

CLSA

Research firm CLSA has reiterated buy rating on the stock and raised the target price to Rs 3,763 from Rs 3,618 per share.

The results were better than its two-wheeler peers. The better cost management, higher ASP helps EBITDA improve QoQ.

The management optimistic on improvement in volume for Royal Enfield and VECV business continued to perform well, reported CNBC-TV18.

Nomura

Broking firm has maintained neutral rating on the stock with a target at Rs 3,094 per share.

RE’s strong price increases kept us concerned on affordability, while its volumes may rebound in FY23 but beyond that may remain in single digit. The exports also face near-term slowdown risks, said Nomura.

With commodity benefits, we raise EBITDA margin estimate to 25-25.4 percent for FY23-24, Nomura added.

Our earnings estimates are higher by +0.5 percent/+4.4 percent, reported CNBC-TV18.

Jefferies

Broking house Jefferies has maintained buy call and raised the target to Rs 3,700 from Rs 3,500 per share.

The Q1 EBITDA was up 10 percent QoQ & is 10 percent above our estimate, while RE volumes grew a slight 1 percent QoQ, while EBITDA-per-vehicle expanded 4 percent QoQ and see multiple positives for RE going ahead, said Jefferies.

The company expects the new hunter motorcycle to also expand its addressable customer base.

Broking house see EPS more than doubling over FY22-24, reported CNBC-TV18.

Motilal Oswal

An improving supply-side, product launches, and ramp-up in exports will drive the next phase of growth for RE. This, coupled with stable commodity prices, will support margin and drive earnings growth.

We maintain our Buy rating with Target Price of Rs 3,600 (Sep’24E SoTP).

Prabhudas Lilladher

We maintain buy on Eicher Motors as we anticipate (1) volume growth from new product launches (2) rising exports volume from channel expansion and market share gains and (3) margin expansion as operating leverage kicks in (we build in ~380bps EBITDAM expansion over FY22-24E).

We increase our EPS estimates by 2/5% for FY23/24 and assign a revised SoTP based Taregt Price of Rs 3,400 (at 28x FY24E EPS for standalone business vs 27x earlier to factor in positive outlook and 18x for VECV).

At 09:20 hrs Eicher Motors was quoting at Rs 3,207.95, up Rs 53.40, or 1.69 percent on the BSE.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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first published: Aug 11, 2022 09:33 am
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