Eicher Motors hits new high

The stock rallied 7% to Rs 5,027 on the National Stock Exchange.

Eicher Motors has rallied 7% to Rs 5,027 in early morning deals on the National Stock Exchange (NSE). The stock opened at Rs 4,713 and touched a high of Rs 5,109, also its record high on the NSE. A combined around 25,000 shares have changed hands on the counter till 0950 hours on the NSE and BSE.

Shares of two-three wheelers maker has outperformed the market by surging over 27% post September quarter earnings on November 7, compared to 0.02% rise in benchmark S&P BSE Sensex.

The company had reported a robust performance for the first nine months ended September 2013 due to sustained strong sales of its iconic Royal Enfield motorcycle. On standalone basis, net profit of the company almost doubled to Rs 212 crore in January-September 2013 as against Rs 111 crore during the same period last year. The company had profit of Rs 145 crore in entire previous year 2012.

Meanwhile, according to media reports, analyst at Bank of America Merrill Lynch recommend a ‘’Buy” rating on the stock.

Sharp revision to forecasts, mainly due to motorcycles which contributes over 75% of profit, and higher valuation multiples, aided by reversion to FCFs (free cash flows) are the key reasons for the upgrade, the report added.