Prabhudas Lilladher recommended accumulate rating on Eicher Motors with a target price of Rs 22,869 in its research report dated August 13, 2020.
Prabhudas Lilladher's research report on Eicher Motors
We downgrade EIM to Accumulate as we think recent valuation catch-up at 27x/23x FY22/23 EPS factors in near to med term positive. Structurally we remain positive on key factors such as 1) RE’s under penetration in key motorcycling states (market share of <4% v/s national average of 6%) and 2) RE’s monopoly for upgrade options in >300CC segment. In 1QFY21 EIM’s consolidated performance were in-line with breakeven margins at 0.5%. This we believe is a reasonable performance in challenging conditions with high fixed cost structure. We cut FY21 consol EPS by 3.5% to factor in for weak VECV margins and maintain FY22/23 earnings.
Outlook
We downgrade the stock to Accumulate with revised price target of Rs22,869 (v/s Rs20,852) as we value stock at 25x in line with 10 year LPA v/s 24x earlier) rolled forward to Sep-22 consol EPS.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More