Eicher Motors rallies 5% on strong Royal Enfield sales numbers for December

Shares of Eicher Motors rallied 5 per cent to Rs 2,714.15 on the BSE in Monday’s intra-day trade after the company’s Royal Enfield brand reported 43 per cent rise in month-on-month sales of 73,739 units in the month of December 2021. The company reported its best-ever reading in last several months. On year on year (YoY) basis, the Royal Enfield sales grew 7 per cent from 68,995 units in December 2020.

The key highlight for the month was robust volume prints at Royal Enfield, sustenance of which could subside growth concerns at the Eicher Motors, ICICI Securities said in a note.

At 09:27 am; the stock was up 3.4 per cent at Rs 2,678.75 on the BSE, as compared to 0.51 per cent rise in the S&P BSE Sensex. It had hit a 52-week high of Rs 3,035.50 on January 22, 2021.

In the past one month, Eicher Motors has outperformed the market by surging 11 per cent, as against a 2.6 per cent gain in the Sensex. However, in the past six months, it was up a per cent, as compared to 12 per cent rally in the benchmark index.

While, announcing September quarter (Q2FY22) results in November, the company’s management said it expects a swift volume recovery ahead, led by improving chip supplies and a healthy order book. Management reiterated its focus on new products and network expansion.

The management stated that once the semi-conductor shortage eases, output would begin to improve. While domestic demand remains sluggish, Royal Enfield is seeing increased traction in exports, which are expected to surpass 60K units for the first time (+58 per cent YoY) in FY22E, analyst at HDFC Securities said in Q2 result update.