Reduce Eicher Motors; target of Rs 3207: HDFC Securities

HDFC Securities recommended reduce rating on Eicher Motors with a target price of Rs 3207 in its research report dated August 03, 2023.

Broker Research

August 07, 2023 / 11:53 IST

Reduce

26 Aug, 2025 12:21

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HDFC Securities' research report on Eicher Motors

Eicher’s Q1 PAT was ahead of estimates due to higher-than-expected other income at RE and strong performance at VECV even as standalone EBITDA was in line with estimates. Earnings beat at VECV was driven by better-thanexpected revenue growth even as margins were in line. Competition has significantly heightened in the 250-500cc segment post the recent launches by both Harley Davidson (in partnership with Hero MotoCorp) and Triumph (in partnership with Bajaj Auto) at extremely competitive and similar price points to RE. While their ambitions are likely to be much higher, even if both these peers together are able to ramp up to 10% of RE volumes over 6-9 months, it would cap RE’s future growth potential. Given the competitive aggression, we believe that RE would be forced to reconsider its pricing/brand strategy very quickly, which will in turn drive margin pressure. Even exports momentum is now derailed given the geopolitical challenges at least in the near term.

Outlook

Reiterate REDUCE with a revised price target of INR 3,207 (from INR 3,086) as we roll forward to June 25 earnings.

For all recommendations report, click here