Shares of Eicher Motors were trading up on Thursday after the company posted Q2 results on Wednesday evening.
What Happened: The Royal Enfiled maker posted an 8.26% year-on-year rise in net profit to ₹1100.33 crore. The two wheeler company posted a revenue of ₹4263.07 crore, gaining 5.70% from the previous year. The company's EBITDA rose marginally by 0.5% to ₹1087.7 crore.
In the quarter, the company saw a decline in Royal Enfield sales to 2.25 lakh units compared to 2.29 lakh units in the previous year's quarter. Its commercial vehicle unit, sold 20,774 units in the quarter compared to 19,551 units in the previous year. The units's revenue gained 8% to ₹5,538 crore.
Brokerage Views: Goldman Sachs maintained a "buy" call with a target price of ₹5,400. According to the brokerage, the product cycle and demand visibility represent good risk reward. The research firm likes the new product launch cycle and demand visibility on recently launched Eicher models.
The Bullet 350 Battalion model helped address signs of decline that came from customer's indecisiveness, the research firm noted.
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Citi also maintained a "buy" call while cutting the target price of ₹5,350. The Q2 EBITDA was slightly below estimates for due to high marketing spends, the brokerage noted. The research firm added that the focus should be on volume growth and not just margins. Citi increased the volume estimates for Royal Enfield over FY25-27, acknowledging better demand and supported by enhanced market activities.
Jefferies also retained "buy" call with a target price of ₹5,500. The brokerage said that Royal Enfield volumes are showing signs of picking up and the model would be a key beneficiary of two-wheeler premiumisation trends. The research firm added that the toughest phase of competition is behind the company.
Price Action: Shares of Eicher Motors opened 6.40% up to ₹4,882.45 on Thursday.
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