CLSA has reiterated its Hold rating on Eicher Motors, reducing the target price to ₹4,883 from ₹4,909, reflecting a 5% downside from the current market price (CMP) of ₹5,153.55.
Key Takeaways from Management Meet:
- Focus on Volume Growth: The company is targeting higher volumes while safeguarding EBITDA margins through economies of scale.
- New Segment Refresh: Plans to refresh the 350cc, 450cc, and 650cc segments are in place to drive growth.
- Capacity Expansion:
- Assembly capacity to expand to 1.4 million units annually.
- Addition of new painting and chrome facilities.
- Replacement Demand: Currently at 7-8% of domestic sales, replacement demand is anticipated to rise soon.
- Strong Semi-Rural Presence: The top 20/50 cities contribute 25%/45% of volumes, showcasing a robust presence in semi-rural regions.
Conclusion:
Eicher Motors is focusing on strategic growth across its key segments while expanding its production capacity. However, the anticipated downside in target price indicates cautious optimism regarding its near-term performance.
Disclaimer: This information is for informational purposes only and does not constitute financial advice.
