Eicher Motors share price rises 5% as Q1 Results beat estimates: Among Largest Nifty-50 stock gainers: Buy or Sell?

Stock Market today: Eicher Motors share price rises 5% post Q1 Results as earnings beat estimates. The stock was among largest Nifty 50 gainers.

Eicher Motors share price that opened at ₹4,805.65 however went to scale ₹4,839.90 , marking gains of more than 5% over the previous close of ₹4,576.90, on the NSE on Friday.

Eicher Motors had reported its Q1 performance post market hours on Thursday. Its Q1FY25 net profit increased by 20% to ₹1,101 crore from ₹918 crore in the same time the previous year.

In the first quarter of the current fiscal year, the manufacturer of commercial vehicles saw a 10.2% increase in revenue from operations to ₹4,393 crore.

Eicher Motors said that it recorded its highest ever quarterly Ebitda and Net profit. Ebitda stands for Earnings Before interest Tax depreciation and amortisation.

Compared to ₹1,021 crore in the same period last year, Eicher Motor's Ebitda increased 14.2% to ₹1,165.5 crore in the June quarter.

The margin increased by 26.5% over the same period the previous year, as opposed to 25.6%.

Q1 performance beats estimates

Eicher Motors reported consolidated Ebitda was 6% above our expectations, led by higher-than-expected Average Selling Price and gross margin, said analysts at Kotak Institutional Equities.

Royal Enfield Average Selling price grew 9% YoY despite a 1% YoY decline in volumes. RE’s margins also remained stable despite weak volume growth, led by a richer mix.

Management expects domestic demand to pickup on the back of its new launches ahead of the festive season.

Eicher Motors Q1 Ebitda however was in line with Jefferies estimates

Analyst views

The domestic demand trajectory has not witnessed any material uptick after the multiple new launches; hence, we expect the company’s 250 cc industry growth trajectory to remain below the Street’s expectations said analysts at Kotak Institutional Equities. The launch of the Guerrilla 450 would have a marginal impact on its volume growth, given the limited benefits for consumers to shift to the higher cc segment, in terms of drive and features versus premium pricing, in their view.

The recent weakness in Royal Enfield volumes is a concern as per Jefferies too, although Eicher is trying to accelerate demand by product actions for Classic and Bullet models, and marketing push for Hunter. However Jefferies says that Royal Enfield should be a key beneficiary of Indian two wheeler premiumization and the toughest phase of competition is behind. Analysts at Jefferies India Pvt Ltd also have cut their FY25-27 EPS by 2-4%, but retain Buy rating with target price of ₹5500 (earlier ₹6000) still expecting more than 15% upside.

However Analysts at Motilal Oswal Financial Services have cut their FY25 and FY26 estimated earnings per share by 5% and 3% respectively to factor in weaker-than- expected RE volumes for FY25 year to date and have Sell Ratings

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

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