Eicher Motors erases about ₹10,700 crore mcap in three sessions; what should you do?
Eicher Motors declined 3 per cent in intraday trade on BSE on Thursday (July 6), looking set to extend their losing streak into the third consecutive session. The stock opened at ₹3,268.95 against the previous close of ₹3,309.95 and fell 3 per cent to the intraday low of ₹3,207.55. The stock has been in the red since Tuesday, July 4, making investors poorer by about ₹10,700 crore in three sessions as the market capitalisation (mcap) of the stock was ₹88,540 crore around 1 pm today, down from ₹99,248 crore on July 3.
The stock has been under pressure since Hero Moto Corp and Harley Davidson announced the debut of the X440 in India. As Mint reported earlier, the X440 is the smallest and most cost-effective Harley-Davidson motorcycle to be introduced in India since the Street 750, thanks to a partnership between Harley-Davidson and Hero MotoCorp. The Royal Enfield Hunter 450, which Eicher Motors will soon launch, is in direct competition with the X440, which is priced at ₹2.29 lakh (ex-showroom).
Read more: Hero rolls out 440cc Harley at ₹2.29 lakh The stock hit its 52-week high of ₹3,886 on November 1, 2022, and its 52-week low of ₹2,810 on July 6, 2022. The stock has significantly underperformed the BSE Auto index and benchmark Sensex in the last one year. The BSE Auto index has risen 28 per cent and the Sensex has gained 22 per cent in the last one year while shares of Eicher Motors have gained only 11 per cent in that period.
Analysts and brokerage firms do not look positive about the stock. Brokerage firm HDFC Securities has downgraded the stock to a 'reduce' from an 'add' and cut the target price to ₹3,086 from ₹3,715 earlier. The brokerage firm trimmed its earnings estimates by 16-18 per cent over FY24-25E as it
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