Eicher Motors share price falls over 3% as analysts expect competition to hit Royal Enfield volumes; Should you buy?

livemint.com:

₹3,729.05 apiece on the BSE. Eicher Motors posted a consolidated net profit of ₹995.97 crore for the quarter ended December 31, recording a growth of 34.43% from ₹741 crore in the year-ago period, led by price increases and higher volumes. The company’s revenue from operations in Q3FY24 rose 12.28% to ₹4,179 crore from ₹3,721 crore, year-on-year (YoY).

The auto major’s EBITDA during the quarter increased 27% to ₹1,090 crore from ₹857 crore, while operating margin improved to 26.08% from 23.03%, YoY. Most analysts highlighted that the rising competition for Royal Enfield may impact volumes going ahead. Here’s what brokerages have to say about Eicher Motors’ Q3 results and Eicher Motors stock price: Royal Enfield’s domestic demand trajectory has not witnessed any material uptick after the launch of Hunter 350, hence, Kotak Institutional Equities expects the >250 cc industry growth trajectory to remain below the Street’s expectations.

Scale-up of Bajaj-Triumph and Hero-Harley will further moderate volume growth trajectory for the company. The export segment is expected to remain muted in the near term, but Eicher Motors continues to improve its profitability, Kotak Institutional Equities noted. It has fine-tuned FY2024-26E consolidated EPS estimates, with lower volume assumptions for the Royal Enfield business and lower share of profit from JV (lower volume assumptions for CV industry), offset by higher consolidated EBITDA margin assumptions.