Eicher Motors shares hit new 52-week high despite 40% dip in Q2 profit

Eicher Motors share price jumped over 3 percent intraday on November 13 hitting new 52-week high of Rs 2,452 per share, a day after the auto maker declared its September quarter results.

Eicher Motors on November 12 reported a 40 percent decline in consolidated net profit at Rs 343.34 crore in the second quarter ended September 30. The company had posted a net profit of Rs 572.69 crore in the corresponding quarter last fiscal, Eicher Motors said in a regulatory filing.

Total revenue from operations during the period under review stood at Rs 2,133.60 crore as against Rs 2,192.47 crore in the same quarter a year ago, it added.

The stock was trading at s 2,440.90, up Rs 87.35, or 3.71 percent at 09:51 hours. It has touched a 52-week high of Rs 2,452. It has touched an intraday high of Rs 2,452.00 and an intraday low of Rs 2,240.

The scrip also witnessed a spurt in volume by more than 1.44 times and was trading with volumes of 63,268 shares, compared to its five day average of 48,403 shares, an increase of 30.71 percent.

CLSA has maintained sell rating on the stock but has raised target to Rs 2,000 from Rs 1,880 per share. It is of the view that Q2 improvement was in-line with peers. Better H2 volume was seen, driven by order backlog and new launches, according to a CNBC-TV18 report.

It is of the view that volume and profitability have underperformed mass-market peers and feels that valuation premium (75-90 percent over Hero Moto and Bajaj Auto) is unsustainable.

Nomura has a neutral rating on Eicher Motors and has a target of Rs 2,328 per share. Production is constrained due to variant mix and may remain at 70,000-75,000 for now, it said.

It factors in -13 percent/+25 percent /+10 percent YoY volumes for RE and has factored in FY21-23 EBITDA margin at 22.6 percent/24.1 percent/24.6 percent.

Nomura has raised VECV volume estimates to -21 percent/+35 percent/+32 percent and margin to 2.6 percent/5.5 percent/7.8 percent. It feels that the stock may move higher if new models are successful or demand is strong.

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