Eicher Motors gains on bullish outlook from a foreign brokerage

Eicher Motors rose 2.05% to Rs 18,840.55 at 12:31 IST on BSE on reports a foreign brokerage maintained outperform rating on the stock.

Meanwhile, the S&P BSE Sensex was up 129.92 points or 0.49% at 26,816.43.

On BSE, so far 3,808 shares were traded in the counter as against average daily volume of 28,887 shares in the past one quarter.

The stock hit a high of Rs 18,869.05 and a low of Rs 18,501 so far during the day. The stock had hit a record high of Rs 19,525 on 25 May 2015. The stock had hit a 52-week low of Rs 7,061.60 on 23 June 2014.

The stock had outperformed the market over the past one month till 16 June 2015, sliding 1.31% compared with the Sensex's 2.33% fall. The scrip had also outperformed the market in past one quarter, jumping 16.83% as against Sensex's 6.16% fall.

The large-cap company has equity capital of Rs 27.14 crore. Face value per share is Rs 10.

The foreign brokerage reportedly said that introduction of new product platforms, enhanced sales and after-sales experience supported with capacity expansion would be the key growth drivers for Eicher Motors. Demand recovery in commercial vehicles (CV) industry is now more widespread and growth seems sustainable, the brokerage said.

Addition to order book remains strong with waiting list of over five months despite sharp ramp-up in production, the brokerage reportedly said. Production guidance stays at 45,000 units/60,000 units for calendar years (CY) 2015 and 2016 respectively from the existing plant, the brokerage said. Royal Enfield has already acquired additional land for additional expansion needs, which can increase total production capacity to one million units, the brokerage reportedly said.

On a consolidated basis, Eicher Motors' net profit rose 40.4% to Rs 195.28 crore on 33.3% growth in net sales to Rs 2532.97 crore in Q1 March 2015 over Q1 March 2014.

Eicher Motors (EML) is the flagship company of the Eicher Group, which was a catalyst in the green revolution in India with the production of India's first agricultural tractor in 1959. EML is now a leading player in the Indian automotive space. Its joint venture with the Volvo group, VE Commercial Vehicles, designs, manufactures and markets reliable, fuel-efficient trucks and buses; and is leading the path in driving modernization in commercial transportation in India and other developing markets. Eicher Motors also owns the iconic Royal Enfield motorcycle business, which leads the premium motorcycle segment in India.

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