Eicher Motors' stock premium to sustain

Volumes expected to grow upwards to 20% annually, earnings by 25%, investors need 5-year horizon

Eicher Motors, already up 40 per cent over a year, hit a new 52-week high on Wednesday. It zoomed past Bajaj Auto as the most valuable automobile stock earlier this week; it has made investors more money than any other large-cap share in the segment over the past 10 years.

This is backed by operating performance, with volumes of the two-wheeler or Royal Enfield segment growing 50 per cent annually over six years. Demand has outstripped supply, stretching the waiting period to a little under two months at present. The start of a new factory in Chennai this month might