Eicher Motors gain over 8% post Q2 earnings; Jefferies gives a 'buy' on signs of revival in RE volumes

After the Royal Enfield company Eicher Motors released its Q2 results after market hours on Wednesday, shares of the company are in focus in today's session after brokerage remain optimistic to neutral. Ahead of the results, amid a steep correction across-the-board, the stock ended over 3 per cent lower at Rs 4,589.1 per share on the BSE.

In trade today, amid resilience in the market, the stock of Eicher Motors zoomed over 8 per cent to Rs 4,972.5, nearing its all-time high price of Rs 5,104.5 on September 27, 2024.

Royal Enfield parent Eicher Motors on Wednesday reported a consolidated net profit of Rs 1,100 crore for the quarter ended September 30, marking an increase of 8.3 per cent over the corresponding period a year ago. Eicher Motors' revenue grew 3.6 per cent to a record Rs 4,263 crore for the fiscal second quarter, according to a regulatory filing. Zee Business analysts had estimated Eicher Motors' net profit at Rs 1,070 crore and revenue at Rs 4,474 crore for the July-September period.

Read more on company results, here.

Here's how brokerages look at Eicher Motors post its Q2:

Jefferies remains optimistic on the counter and has stipulated a target of Rs 5,500 per share- a potential upside of 20 per cent from the previous close. The brokerage highlighted that the Q2 EBITDA has been flat year-on-year (YoY), but 8 per cent below estimates on lower-than-expected RE margin. Also, it added RE Volumes are showing signs of pick up. RE Should Be A Key Beneficiary Of 2W Premiumisation, added the brokerage.

Jefferies notes that the toughest phase of competition is now behind.

Goldman Sachs and Citi meanwhile have lower the target marginally. Goldman Sachs has maintained a buy on the counter with a target pegged at Rs 5,400 from the earlier Rs 5,600. The brokerage said that the Q2 has been in-line with product cycle and demand visibility representing good risk reward. 

The brokerage likes the new product launch cycle and demand visibility on recently launched models at Eicher. The company has been focussing on building back inventory by following the replenishment model.

Bullet 350 Battalion Black variant helped address signs of decline arising from customer indecisiveness, it added.

Eicher Motors share price performance

The stock has currently strengthened around 29 per cent from its 52-week low price. However, the stock in the last one year has scaled higher by 26 per cent.