Motilal Oswal upgraded Eicher Motors to ‘neutral’ from its previous ‘sell’ rating and raised its target price to ₹6,960 from ₹6,313 previously. The revised price target implies an upside potential of just 2% from last Friday’s closing levels.
Motilal Oswal highlighted the conclusions of the management meeting and said:
Eicher Motors’ domestic demand momentum remains healthy, especially in the 350cc segment, where demand currently exceeds supply.
On the contrary, demand in the 350 cc+ segment weakened following the increase in GST for this category, but is now gradually recovering due to multiple product interventions by Royal Enfield.
However, exports remain a challenge for the company as the outlook for regions such as Europe, the United States and Thailand, which account for half of Eicher Motors’ exports, remains challenging, the brokerage said.
The immediate risk posed by the current geopolitical conflict is a possible gas supply shortage, which could disrupt production in the short term if the situation persists, Motilal Oswal added.
The automaker’s management emphasized that its continued focus is on profitable volume growth rather than margins.
Due to global uncertainties, the stock has corrected around 17% from its peak and now appears fairly valued at 29.8 times its estimated FY2027 earnings price, and 26 times its FY2028 earnings estimates, Motilal Oswal said.
Of the 40 analysts covering the stock, 25 have a “buy” rating, 11 have a “hold” rating and four have a “sell” rating.
Eicher Motor shares fell 0.7% to Rs 6,763 apiece around 9.45 am on Monday. The stock has fallen 13.5% in the last month.
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