The shares of this large-cap automobile stock slipped more than 5 percent today after another player in the industry is striving hard to eat up the existing customer base by offering new models at much affordable rates.
Eicher Motors Limited is an India-based automobile manufacturer conducting business through two broad product types such as motorcycles under the ‘Royal Enfield’ brand and commercial vehicles partnering with Volvo. The company derives a majority of its revenues from domestic operations.
The competitors of Eicher Motors such as Hero Motocorp, in partnership with Harley-Davidson, launched the “X440”, the smallest and most affordable Harley-Davidson bike to ever come to India with an ex-showroom price of Rs 2.29 lakhs.
“We will do whatever we can to win in the premium segment.” Mr. Niranjan Gupta, CEO of Hero MotoCorp, commented on the launch.
The shares of Eicher Motors Limited are currently trading at Rs 3,420. On the other hand, the shares of Hero Motocorp Limited rose around 3 percent today and currently are available for Rs 2,975.
Eicher Motors is an industry leader when it comes to motorcycles in the premium segment and enjoys more than 80 percent market share in the same. The continuous efforts from peers, in some way, affect Eicher Motors as it is a likely move to reduce its market share.
The sales numbers, YoY, witnessed a jump of 26 percent from 61,407 units in June 2022 to 77,109 units in June 2023.
A glance at the consolidated financials of the company exhibits an increase in the operating revenues as well as the net profits. The operating revenues went up from Rs 10,297 crores during FY21-22 to Rs 14,442 crores in FY22-23 and net profits, in congruence, moved up from Rs 1,616 crores to Rs 2,598 crores during the same period.
According to the shareholding data available for the March 2023 quarter, the Promoters hold a 49.2 percent stake, and Foreign Institutional Investors (FIIs) hold a huge stake of 28.63 percent in the company.
Written by Amit Madnani
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