Eicher Motors shares gain 4% as Q1 profit rises; Analysts mixed on outlook

Eicher Motors shares rose 4 per cent after it reported a 9 per cent rise in profit during the June quarter of the current financial year

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Shares of Eicher Motors surged nearly 4 per cent on Friday after the company reported a 9 per cent rise in profit during the first quarter of the current financial year (Q1FY26). 

 

The Royal Enfield parent's stock rose as much as 3.68 per cent during the day to ₹5,670 per share, the steepest intraday rise since May 12 this year. The stock pared gains to trade 2.4 per cent higher at ₹5,600 apiece, compared to a 0.11 per cent decline in Nifty 50 as of 10:29 AM. 

 

Shares of the company were at the highest level since July 18 and currently trade at 9.1 times the average 30-day trading volume, according to Bloomberg. The counter has risen 15.6 per cent this year, compared to a 4.4 per cent advance in the benchmark Nifty 50. Eicher Motors has a total market capitalisation of ₹1.52 trillion.  Track LIVE Stock Market Updates Here

Eicher Motors Q1 results 

Eicher reported a 9.4 per cent year-on-year (Y-o-Y) rise in consolidated net profit to ₹1,205 crore for the quarter ended June 30. The company's revenue from operations rose 14.8 per cent to ₹5,042 crore. Its earnings before interest, taxes, depreciation, and amortisation (Ebitda) increased to ₹1,203 crore.

 

Royal Enfield recorded a 14.7 per cent growth in sales, delivering 261,326 motorcycles in Q1 FY26, compared to 227,736 units in the same quarter last year.

 

Meanwhile, VE Commercial Vehicles (VECV), a joint venture between Eicher and Volvo Group, posted revenue of ₹5,671 crore, up 11.9 per cent year-on-year. VECV’s Ebitda rose 32.6 per cent to ₹511 crore, as it sold 21,610 vehicles during the quarter, compared to 19,702 in the previous year. 

Analysts on Eicher Motors 

Eicher Motors' net profit in the first quarter of FY26 came in ahead of Motilal Oswal’s estimates. The beat was driven by strong other income and a better-than-expected performance from VE Commercial Vehicles, the brokerage said. 

 

The brokerage is factoring in a 10 per cent volume CAGR for Royal Enfield over FY25-27, as the company pivots to a growth-led strategy. However, it expects margins to remain under pressure, with any gains from an improved mix, such as higher spares and apparel sales, likely to be reinvested in demand generation.

 

This trend has been visible in recent quarters, where volume growth has come at the cost of profitability. Motilal expects only a 6 per cent earnings CAGR for RE over FY25-27.

 

Given the expected slowdown in earnings growth, the brokerage sees limited upside and finds no justification for premium valuations. It reiterates a 'Sell' rating with a target price of ₹4,698.   ALSO READ: Tariff worries, Sun Pharma Q1 miss: Why are pharma stocks falling today? 

Nuvama Institutional Equities cut its FY26E and FY27E EPS estimates by 2 per cent each, factoring in lower margin assumptions. However, the brokerage remains optimistic on volume momentum, supported by strong demand for new variants of Classic, Bullet, and Hunter, along with continued marketing efforts. 

 

Export growth is also expected to remain strong, driven by an expanding presence in key markets and upcoming model launches. It reiterated its 'Buy' rating and raised the target price to ₹6,400 per share (earlier ₹6,200).