HDFC Securities recommended reduce rating on Eicher Motors with a target price of Rs 2100 in its research report dated November 13, 2020.
HDFC Securities' research report on Eicher Motors
Eicher reported 2QFY21 PAT at Rs 3.4bn (-34% YoY, up sharply QoQ). The OEM has rolled out the ‘Meteor 350cc’ on a new platform along with personalisation options (MIY), which is expected to be a ‘differentiator’. The new launch comes at a time when the competition is increasing – the Honda H’ness CB350 has just been launched. We value the RE business at 23x PE, which is at a 25% premium to the mass market OEMs.
The stock is trading at 43.7/29.8x FY21/22E. We set a revised Sep-22 TP of Rs 2,100 (we are raising our FY22/23E by 5%). Key risks: Faster-than-expected economic pick-up, encouraging response to new launches.
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