ICICI Direct has given Hold recommendation for Eicher Motors with a target price of Rs. 3050 in its research report issued on Feb 11, 2021
ICICI Direct’s research report on Eicher Motors
Eicher Motors (EML) posted decent Q3FY21 results. Consolidated revenues were at Rs 2,828 crore (up 19.3% YoY), tracking Royal Enfield (RE) volume of ~2 lakh units and flat ASPs QoQ at Rs 1.4 lakh/unit. EBITDA margins at 23.8% were up 168 bps QoQ on the back of operating leverage benefits, with gross margins down ~110 bps QoQ. Consequent consolidated PAT was at Rs 533 crore (up 6.8% YoY), with share of profit from VECV JV at Rs 31.4 crore.
We maintain HOLD rating and value EML at Rs 3,050 on SOTP basis (33x FY23E EPS to RE; 25x FY23E EPS to VECV; previous target price of Rs 2,650).