The shares of the leading manufacturer of commercial vehicles gained traction this week after Jefferies gave its ‘buy’ recommendation to an upside of 29 percent.
At 2:15 p.m., on the National Stock Exchange, Eicher Motors Ltd. shares were trading at Rs 4,652.85, down Rs 4.80 or 0.10 percent from the previous close.
Eicher Motors Limited is a leading player in the Indian automobile industry and the global leader in middleweight motorbikes. The company is also involved in truck and bus operations, auto components, and technical consulting services.
In the fiscal year 2023-2024, the company achieved its highest-ever annual sales, totaling 85,560 units, marking a 7.5% growth compared to the previous year’s 79,623 units. Furthermore, it reached a pinnacle in Eicher Trucks and Buses sales, with 83,088 units sold, surpassing the prior record of 77,760 units in FY’23.
The company’s shares exhibited robust performance, yielding returns of 28 percent over the past six months and 15 percent year-to-date.
Revenue experienced a notable surge of 12 percent year-on-year, escalating from Rs 3,804 crore in Q4FY23 to Rs 4,256 crore in Q4FY24. Simultaneously, net profit saw a substantial 18 percent increase, soaring from Rs 906 crore to Rs 1,070 crore during the same period.
Over the past 5 years, Eicher Motors Limited has invested a cumulative amount of Rs. 1,500 crore in research and development.
International brokerage firm, Jefferies has raised Eicher Motors’ price target to Rs 6,000, indicating a 29 percent rise from Monday’s trading price, citing robust fourth-quarter earnings performance.
The recommendation stems from Jefferies’ positive stance on the company’s future prospects, particularly in the two-wheeler segment, which is expected to experience significant growth.
Additionally, the foreign brokerage highlighted a promising trajectory for two-wheelers, indicating robust growth ahead, along with an enhanced long-term market share perspective for the automotive company.
While JPMorgan holds a ‘neutral’ stance, it suggests that the Eicher Motors stock may have limited potential for further increase, as it believes that the current valuation already incorporates positive factors such as market share growth, new product launches, and recent improvements in exports. The brokerage has revised its target price to ₹4,230 per share.
In contrast, Morgan Stanley maintains an ‘underweight’ recommendation on the stock, though it has increased its target price to ₹3,533 per share. According to Morgan Stanley, the company’s performance in the March quarter met expectations at the EBITDA level. The brokerage also highlighted that Eicher Motors, like its competitors, is optimistic about volume growth for the financial year 2025.
Written by Omkar Chitnis
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