ICICI Direct has given Hold recommendation for Eicher Motors with a target price of Rs. 2790 in its research report issued on Feb 15, 2022

ICICI Direct’s research report on Eicher Motors

Eicher Motors (EML) is the market leader in the >250 cc premium motorcycle segment (FY21 market share at 93.5%) through its aspirational models under the Royal Enfield (RE) brand, such as Bullet, Classic, Interceptor among others. Via its JV with Volvo i.e., VECV (EML has 54.4% stake), the company also has a presence in the CV space (6.4% FY21 market share) Strong net cash positive b/s with healthy return ratios metrics

Outlook

We retain HOLD amid lack of volume growth visibility in core RE portfolio We value EML at Rs 2,790 on SOTP basis; assigning 28x PE to RE business & 25x PE to VECV business on average of FY23-24E numbers.

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