Nov 09, 2013, 03.07 PM IST
ICICIdirect.com is bullish on Eicher Motors (EML) and has recommended buy rating on the stock with a target price of Rs 5400 in its November 08, 2013 research report.
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Buy Eicher Motors; target of Rs 5400: ICICIdirect.com
ICICIdirect.com is bullish on Eicher Motors (EML) and has recommended buy rating on the stock with a target price of Rs 5400 in its November 08, 2013 research report.
Like this story, share it with millions of investors on M3
Buy Eicher Motors; target of Rs 5400: ICICIdirect.com
ICICIdirect.com is bullish on Eicher Motors (EML) and has recommended buy rating on the stock with a target price of Rs 5400 in its November 08, 2013 research report.
"Eicher Motors' (EML) Q3CY13 results were ahead of our estimates on the topline, bottomline front. Topline at Rs 1736 crore was higher by ~17 percent QoQ while margins also improved ~210 bps QoQ aided by benign raw material prices and cost reduction measures. The performance from RE has been strong with highest-ever margin performance (19.3 percent) even as the as the new "Oragadam" facility ramps up. VECV's performance has also been admirable in a tough CV cycle, which has seen its peers slip to 1-2 percent margin profile. With the entire 5-49 tonne product line likely to be refreshed, we believe VECV should gain market share at the expense of incumbents. The RE business is a real gem in the domestic auto OEM space, with demand still outstripping supply. We expect the trend to continue, going forward, as demand for cruiser/luxury bikes grows in India as H-D and other international brands focus on the Indian market. On the valuations front, EML deserves premium valuations over peers on consistency of earnings and strong visibility."
"Eicher has been justifiably commanding a premium over other auto OEs, with consistent delivery on earnings. With RE's business at full throttle and VECV likely to improve before too long, we ascribe RE a 20 percent premium to average industry P/E multiple and VECV a 30 percent premium to industry EV/EBIDTA multiple to arrive at an SOTP target price of Rs 5400. We maintain our bullish stance on the stock and recommend BUY," says ICICIdirect.com research report.
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