Eicher Motors Ltd., a blue-chip business with a market value of ₹1,02,575.98 Cr, competes in the consumer discretionary goods and services (CDGS) sector. The parent business of Royal Enfield, Eicher, is a significant player in the Indian automotive industry since Royal Enfield is the flagship company of the Eicher Group. A strategic alliance between Eicher and AB Volvo of Sweden is known as Volvo Eicher Commercial Vehicles Limited (VECV). Since April 1, 2016, the stock of Eicher Motors, which is traded on the BSE and NSE, has been compared to the Nifty 50 Index. Eicher Motors Ltd. is one of the multibagger stocks that has helped investors go from lakhpati to crorepati over the course of a 23-year investment.

Share Price History of Eicher Motors

Eicher Motors Ltd. shares finished at ₹3,750.05 per share today, up 1.85% from the previous closing of ₹3,682.05. The stock’s total volume today was 659,825 shares vs the 20-Day average volume of 928,626 shares. The stock price has increased dramatically from 1.22 on January 1st, 1999, to the present market price, registering a multibagger return and an all-time high of 307,281.15%. Thus, if someone had invested Rs. 1 lakh in the stock 23 years ago, their investment return would be worth Rs. 30.73 crore now.

Over the last five years and the last year, the stock has increased by 20.14% and 31.26%, respectively. In 2022, the stock has increased by 37.93% YTD. On the NSE, the stock reached a 52-week high of ₹3,787.25 on September 21, 2022, and a 52-week low of ₹2,159.55 on March 8, 2022. As of today’s closing price, the stock was trading 0.98% below the high and 73.64% above the low. The stock was spotted trading above the 5-day, 10-day, 20-day, 50-day, 100-day, and 200-day exponential moving averages (EMA) and simple moving averages at its closing price today (SMA).

Eicher Motors Limited RSI indicator value as of 22/09/2022 is 71.6 which shows that the scrip is in the overbought zone. For the quarter ended June 2022, the company recorded a promoter shareholding of 49.21%, FIIs holding of 29.50% (up 0.28% QoQ), DIIs holding of 10.13% (up by 0.18% QoQ), Government shareholding of 0.10% and public shareholding of 11.06% (down by 0.46% QoQ).

Eicher Motors Share Price Target; Should You Buy?

In their research report published today, the research analysts Aditya Welekar and Shridhar Kallani of the brokerage Axis Securities stated that “Royal Enfield (RE) domestic sales decreased by 13% CAGR during FY19-22 led by several challenges. Sales declined as a result of covid-led lockdowns, rising car costs brought on by commodities inflation, depressed consumer attitude, and supply-chain restrictions.

Although there are currently less restrictions on supply and demand, sales would increase in the future as a result of falling commodity prices and stable car pricing. We engaged with over 22+ dealers throughout India to get a sense of the market’s mood. Our channel tests indicate a 20% increase in inquiries and traffic in September 22 and a positive consumer reaction to the recently introduced Hunter 350.

“RE’s wholesale sales figure was at 70,112 in August’22, up 53% YoY and 26% MoM, showing an easing of production limitations,” they continued. If the current sales volumes continue, RE will move into a period of volume growth. In light of this, it will be important to track the wholesale statistics for September 22 to see whether manufacturing problems have been resolved. We forecast volume growth of 19% CAGR FY22-25E due to strong demand, a broad product portfolio, streamlined supply chains, an increasing distribution network, and quickly rising foreign sales. With the correction in commodity prices and the volume rise, operating leverage will increase, which should result in an increase in EBITDA margin (+510bps over FY22–25).

“We advance our valuation from March 24 to September 24 and change the stock’s recommendation from HOLD to BUY Eicher Motors with a new Target Price of ₹4,125 (previously ₹3,120). We value the RE standalone company at 27x (up from 24x previously) on the basis of Sep’24 EPS (₹3,675) and VECV at 12x EV/EBITDA (up from 11x earlier) on the basis of Sep’24 EBITDA (₹448), suggesting an increase of 11% from the CMP, they said.