Eicher Motors Limited, the parent organization of Royal Enfield, the well-known motorcycle brand, witnessed an impressive surge in the stock price as global brokerage UBS issued a positive endorsement. Eicher Motors shares were rising by over 4% as trading began on March 20, and on the US-based brokerage’s ‘buy’ tag.
As of 10:30 am the shares were trading 4.73% higher at ₹3,892.65 on NSE. While the UBS analysts approved an update, they also raised their Eicher Motors price target to Rs 5,000, up 34.5 percent from last close.
Company’s vehicle launch and poor performance from competitors are the primary reasons behind the high rate Eicher Motors. Previously, new product launches from rivals did not favor them. After Harley Davidson’s new launches and Bajaj Auto’s Triumph, their competitive vehicles were forced to launch, but the volumes were just 4,000 units for all the models as of February 2024, notes UBS.
In short, rivals have announced and introduced new models to compete with Eicher Motors, but no one was able to compare the emotional aspect and qualitative output of Royal Bike’s product. The available data confirms that Eicher Motors’ domestic selling percentage has increased by around 45;4 percent in Q3FY24, field sources.
The firm has several new launches in store, including a new bike, the Roadster, which the experts believe will fill the performance gap between Harley Davidson and Triumph. The Roadster would be Royal Enfield’s first liquid-cooled engine, and it could stimulate replacement order from customers.
Furthermore, UBS anticipates a significant renaissance in Eicher Motors’ export demand. The Himalayan 450 is already being ramped up, and new 650s are to be introduced. The experts predict a 25 percent export demand growth between FY25 and FY26.
