ICICI Direct's research report on Eicher Motors
Eicher Motors (EML) posted decent Q3FY21 results. Consolidated revenues were at Rs 2,828 crore (up 19.3% YoY), tracking Royal Enfield (RE) volume of ~2 lakh units and flat ASPs QoQ at Rs 1.4 lakh/unit. EBITDA margins at 23.8% were up 168 bps QoQ on the back of operating leverage benefits, with gross margins down ~110 bps QoQ. Consequent consolidated PAT was at Rs 533 crore (up 6.8% YoY), with share of profit from VECV JV at Rs 31.4 crore.
Outlook
We maintain HOLD rating and value EML at Rs 3,050 on SOTP basis (33x FY23E EPS to RE; 25x FY23E EPS to VECV; previous target price of Rs 2,650).
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