Global brokerage firms raise target price on Eicher Motors post Q2 results; sees over 20% upside

Global brokerage firms such as Jefferies and Credit Suisse maintained their rating on Eicher Motors, but raised their respective target prices on Eicher Motors post September quarter results.

Global brokerage firms raise target price on Eicher Motors post Q2 results; sees over 20% upside. Source: Eicher Motors Twitter

Global brokerage firms such as Jefferies and Credit Suisse maintained their rating on Eicher Motors, but raised their respective target prices on Eicher Motors post September quarter results.

The most aggressive target price of Rs 3,250 was put out by Jefferies that translates into an upside of nearly 22 per cent from Rs 2,665 recorded on 4 November.

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Eicher Motors posted a healthy Q2FY22 results that beat estimates. It reported 9 per cent rise in consolidated profit at Rs 373.2 crore for September quarter 2021-22 boosted by growth in commercial vehicles segment amid semiconductor shortage affecting sales of Royal Enfield motorcycles.

The company had posted a consolidated profit after tax of Rs 343.34 crore in the same quarter last fiscal year, EML said in a regulatory filing.

Total revenue from operations during the quarter stood at Rs 2,249.56 crore as against Rs 2,133.6 crore in the year-ago period.

During the second quarter, group firm two-wheeler maker Royal Enfield sold 1,23,515 motorcycles, a decline of 17.2 per cent from 1,49,120 motorcycles sold over the same period in 2020-21, it said.

"The second quarter of FY 2022 saw a remarkable performance by Royal Enfield in international markets with a growth of more than 130 per cent over the corresponding period last year. Our consistent growth in volumes and global retail presence is testament to the company being on track to realise its vision of becoming the first premium global consumer brand from India," EML Managing Director Siddhartha Lal said.

We have collated a list of recommendations from various global brokerage firms according to a Zee Business TV report:

Jefferies: Buy| Target raised to Rs 3250 from Rs 3200

Jefferies maintained its buy rating on Eicher Motors post September quarter results but raised its target price to Rs 3250 from Rs 3200 earlier.

The 2Q EBITDA fell by 9 per cent on a YoY basis but was 36 per cent above JEFe led by better-than-expected average selling price (ASP), and margin at Royal Enfield (RE).

RE's gross-profit-per-vehicle rose 16 per cent on a QoQ basis to an all-time high We see multiple positives for RE, said the Jefferies report.

UBS: Neutral| Target raised to Rs 2930

UBS maintained its neutral rating on Eicher Motors post Q2 results but raised its target price to Rs 2930.

A strong ASP led the beat. The company is managing commodity inflation well. The demand remains robust, while semiconductor shortage drives FY22-23E EPS cuts.

The Q2 strong ASP jump was on the back of price hikes, better mix and MiY App.

Credit Suisse: Outperform| Target raised to Rs 3290 from Rs 3080

Credit Suisse maintained its outperform rating on Eicher Motors post Q2 results but raised the target price to Rs 3290 from Rs 3080 earlier.

The stock trades at 22.7x FY23 P/E vs mean of 27x Cut FY22 EPS by 9.9% as factor in weak chips supply but keep FY23, FY24 EPS largely unchanged

(With inputs from PTI)

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