The brokerage lowered its FY20 EPS estimate by 11 percent and EBITDA margin forecast to 27.8 percent for FY21 against 30.6 percent in FY19.
Eicher Motors shares declined 1.8 percent Friday intraday after Bank of America Merrill Lynch downgraded the stock and cut price target sharply citing dealer stress.
The stock fell nearly 27 percent in last one year. It was quoting at Rs 20,699.45, down Rs 182.15, or 0.87 percent, on the BSE, at 10:40 hours IST.
BofAML has downgraded Eicher Motors to underperform and slashed price target by 27 percent to Rs 19,000 from Rs 26,000 earlier.
The global investment firm said channel checks suggest dealer stress has risen for first time and volumes are down 20-30 percent at dealer level.
Same-store-sales growth has declined 20-30 percent in some cases versus 3 percent growth year-to-date, it added.
Hence, the brokerage lowered its FY20 EPS estimate by 11 percent and EBITDA margin forecast to 27.8 percent for FY21 against 30.6 percent in FY19.
The company's Royal Enfield sales dropped 14 percent to 62,630 units February 2019, compared to 73,077 units sold in same period last year, but exports increased 49 percent year-on-year to 2,564 units.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
