Eicher Motors hits new high on healthy outlook; stock surges 11% in 5 days

The company's flagship brand - Royal Enfield volumes increased by 24 per cent on a YoY basis in Q4FY25 led by strong demand trends in domestic and export markets.

Eicher Motors, manufactures motorcycles and accessories under the Royal Enfield brand, hit a new high of ₹5,628.95, gaining 2 per cent on the BSE in Wednesday’s intra-day trade on healthy business outlook. In the past five trading days, the stock has rallied 11 per cent.

 

Eicher Motors is the market leader in the >250 cc premium motorcycle segment (market share ~90 per cent) through its aspirational models under the Royal Enfield brand, such as Bullet, Classic, Himalayan, Interceptor, etc.  The company via its joint venture (JV) with Volvo i.e. VECV (Eicher Motors has 54.4 per cent stake), also has a sizeable presence in the commercial vehicle (CV) space (8.2 per cent FY24 market share).

 

 

For FY25, Eicher Motor’s Royal Enfield reported healthy volume prints with total volumes up 10.6 per cent year-on-year (YoY) at ~1. million units. Within this, >350cc segment reported ~40 per cent YoY growth at 141,000 units. For the month of March’25, total volumes were up by 33.7 per cent YoY at 101,000 units with >350 cc segment reporting a growth of 49 per cent YoY.

 

Royal Enfield maintains a commanding position in the >250 cc segment domestically supported by frequent new launches including recent models like Goan classic 350 & Scram 440. Additionally, it has recently introduced new electric vehicle brand, Flying Flea with showcased models due for launch in Q1FY26.  READ STOCK MARKET LIVE UPDATES HERE

 

Analysts at Kotak Institutional Equities expect Eicher Motors’ (consolidated business) EBITDA to improve 14 per cent YoY on a 24 per cent YoY volume growth in March 2025 quarter (Q4FY25), partly offset by higher marketing and advertisement spends and inferior product (higher mix of Bullet 350) and geographical mixes.

 

“Royal Enfield volumes increased by 24 per cent on a YoY basis in Q4FY25 led by strong demand trends in domestic and export markets. As a result, we expect standalone revenues to increase by 23 per cent YoY in Q4FY25 led by 24 per cent YoY volume uptick and 1 per cent YoY decline in ASPs due to inferior product and geography mix,” the brokerage firm said in quarterly earnings preview.

 

Analyst estimate standalone EBITDA margin to increase by 60 bps quarter-on-quarter (QoQ) in Q4FY25 led by operating leverage benefits, higher mix of exports and lower launch cost partly offset by higher marketing and advertisement spends and inferior product mix in the domestic market.  ALSO READ | These 2 smallcap stocks trade above 200-DMA after 11 months. Time to buy?

 

With focus on export markets amidst increasing assembly plant operations, Royal Enfield is expected to gain meaningfully in this space with addressable export market size estimated at ~1 million units vs. its export sales volume of ~80k units in FY24. With upcoming new launches in pipeline coupled with tangible steps being taken in the electric vehicle (EV) space, there exists healthy growth longevity for Royal Enfield franchise, ICICI Securities said in the company update.

 

The brokerage firm believes market reaction to Eicher Motors’ focus on growth over margins is overdone as it will in sum total lead to overall healthy growth in profit after tax. With tailwind expected from recent relaxation of personal income tax regime, analysts said they continue to assign BUY rating on the stock and value Eicher Motors at ₹6,000.