Eicher Motors hits three-month high; stock up 10% post Q3 results


Photo: Official Website of Royal Enfield

Photo: Official Website of Royal Enfield


  Eicher Motors gained3% to Rs 25,449 on the BSE in an otherwise subdued market. The stock, trading at its highest level since November 1, 2016, is 4.5% away from its record high of Rs 26,602 touched on September 29, 2016 in intra-day trade.

Thus far in February, the stock has appreciated by 10% after the company reported good set of numbers for the quarter ended December 2016 (Q3FY17). In comparison, the S&P BSE Sensex was up 2.4% during the period.

Eicher Motors is engaged in manufacturing automobile products and related components. The Company also owns the Royal Enfield motorcycle business.

The company had reported a strong 49% year on year (YoY) jump in its consolidated net profit at Rs 417 crore in Q3FY17 on back of 43% YoY rise in total operational income at Rs 2,071 crore. It also recorded its highest ever and best-in-class EBITDA (earnings before interest, tax, depreciation and amortization) margin at 31.4%.

“Royal Enfield (RE) margins expanded 50bps QoQ/340bps YoY to 31.8%, beating our estimates of 30.8%. Margins were driven by a 150bps reduction in other expenses due to lower marketing expenditure,” analysts at Religare Institutional Research said in a results preview. The broking firm maintains ‘buy’ ration on the stock with target price of Rs 27,500.

Meanwhile, RE, the two-wheeler division of Eicher Motors, reported a 25% jump in total sales at 59,676 units in January. The two-wheeler manufacturer had sold 47,710 units in January 2016.

At 01:07 pm; the stock was up 2.3% at Rs 25,348 as compared to 0.02% decline in the S&P BSE Sensex. A combined 46,838 shares changed hands on the counter on the BSE and NSE so far.