One of the leading Indian multinational automotive companies engaged in manufacturing motorcycles and commercial vehicles. The stock has surged by 7.56% after the announcement of the quarterly results.
The company’s revenue has increased by 3.8% YOY to Rs. 4186.38 crore, and net profit increased by 8.27% YOY to Rs. 1,100.33 crore. After the results, Goldman Sachs, Nuvama, and Citi brokerage have provided their target price estimates. You should know about this.
Stock movement
After announcing its quarterly results, Eicher Motors Limited‘s share has jumped by 7.63% from the previous close of Rs. 4,589.10. The stock opened at Rs. 4,697.55 and is currently trading at Rs. 4,939.15 with a high of Rs. 4,972.50 and a low of Rs. 4,697.55. The market capitalization now stands at approximately Rs. 1,35,385.99 crore.
Q2 FY25 Result Walkthrough
Coming into the quarterly results of Eicher Motors Limited, the company’s consolidated revenue from operations increased by 3.80 percent YOY, from Rs. 4,033 crore in Q2 FY24 to Rs. 4186.38 crore in Q2 FY25, and down by 2.94 percent QoQ from Rs. 4,313.34 crore in Q1 FY25.
Further, the company’s EBITDA margin has decreased by 80 bps, from 8.1% in Q2 FY24 to 7.3% in Q2 FY25.
In Q2 FY25, Eicher Motors Limited’s consolidated net profit slightly increased by 8.27 percent YOY, reaching Rs. 1,100.33 crore compared to Rs. 1,016.25 crore during the same period last year. As compared to Q1 FY25, the net profit has slightly decreased by 0.10 percent, from Rs. 1,101.46 crore.
The basic earnings per share increased by 8.13% and stood at Rs 40.15 as against Rs 37.13 recorded in the same quarter in the previous year.
In terms of return ratios, Eicher Motors Limited’s share ROE and ROCE are currently at 24.2 percent and 31.1 percent, respectively. Eicher Motors Limited has a debt-to-equity ratio of 0.02x, which shows the company is almost debt-free.
Manufacturing Facilities
Eicher Motors Limited has manufacturing facilities across Madhya Pradesh and Karnataka. The company operates multiple specialized plants, including a 90,000-unit capacity truck plant and an 80,000-unit VE Powertrain facility in Pithampur, along with a new 40,000-unit truck plant in Bhopal.
Additionally, the company has a 12,000-unit bus plant in Baggad and a 2,000-unit Volvo Bus plant in Bangalore. The infrastructure is supported by a parts distribution center in Pithampur and component manufacturing units in Dewas.
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Volume Growth in Eicher Motors
In Q2 FY25, Eicher Motors Limited showed positive volume growth across multiple segments. HD (Heavy Duty) volumes increased by 8.2% to 5,155 units, while LMD remained stable at 9,565 units. The bus segment showed strong performance, with HD Bus and LMD Bus growing by 20.6% and 22.3%, respectively.
Eicher Motors Limited’s exports rose by 12.2% to 1,130 units. VTI maintained growth at 6.6%, and VBI improved by 9.4%. Overall VECV volumes grew by 6.3% to 20,774 units, as compared to 19,551 units in Q2 FY24.
Here is how brokerages have responded to the results
Goldman Sachs maintains a buy rating with a Rs 5,400 target price, with strong product cycles and positive demand visibility, depicting an upside potential of 17.67% from the previous close. The recent launch of the Bullet 350 Battalion Black variant has strengthened its market position, and the company’s shift to a replenishment model for inventory management demonstrates strategic optimization of operations.
Citi brokerage maintains a bullish viewpoint on Eicher Motors, with cut target prices from Rs 5,500 to Rs 5,350, which has an upside potential of 16.58% due to increased marketing expenses impacting EBITDA. The company remains optimistic about Royal Enfield’s volume growth prospects for FY25-27.
Nuvama has shown the most significant change in outlook, upgrading the stock to a buy rating and raising the target price substantially from Rs 4,500 to Rs 5,500, showing an upside potential of 19.85% from the previous close. The upgrade is backed by expectations of a robust 12% YoY growth in H2FY25, driven by festive demand, focused product strategy, and enhanced marketing initiatives.
Company Overview
Eicher Motors Limited was established in 1982 and is a prominent Indian multinational automotive company headquartered in New Delhi, specializing in the manufacture of motorcycles and commercial vehicles.
The company is best known for its subsidiary, Royal Enfield, which is recognized as the world’s oldest motorcycle brand still in production, dating back to 1901. Eicher Motors has established itself as a leader in the mid-size motorcycle segment and operates in over 60 countries.
Written By – Nikhil Naik
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