Eicher Motors drops nearly 7% post Q3 results; should you buy?

Shares of Eicher Motors fell almost seven per cent in intraday trade on February 11 after the company reported its December quarter (Q3FY25) results. The stock slipped to an intraday low of Rs 4,966.15 as global brokerage firm Goldman Sachs lowered its target price, citing rising marketing costs as a concern.

Goldman Sachs revises target price downward
Goldman Sachs maintained a ‘Buy’ rating on Eicher Motors but reduced its target price to Rs 5,900 from Rs 6,000, implying a 12.5 per cent upside from the previous close. The brokerage noted that while Q3 earnings were in line with expectations, increasing marketing expenses led to a five per cent cut in earnings per share (EPS) estimates for FY25-27. Additionally, regulation-driven price hikes were more significant for Eicher than for other industry players.

Q3 performance sees profit and revenue surge
Eicher Motors reported an 18 per cent increase in net profit to Rs 1,170 crore in Q3FY25, compared to Rs 995.97 crore in the same period last year. Revenue from operations jumped 19 per cent to Rs 4,888 crore from Rs 4,116 crore in Q3FY24. Meanwhile, earnings before interest, tax, depreciation, and amortisation (EBITDA) grew 10 per cent year-on-year to Rs 1,201 crore.

VE Commercial Vehicles posts record sales
The company’s commercial vehicle arm, VE Commercial Vehicles (VECV), recorded a six per cent year-on-year rise in revenue to Rs 5,801 crore, while its EBITDA grew 16 per cent to Rs 509 crore. Profit after tax for the segment jumped 44 per cent to Rs 301 crore. The company achieved its highest-ever quarterly sales volume, selling 21,012 vehicles, up from 20,706 units in Q3FY24.

Royal Enfield registers record sales
Royal Enfield, Eicher’s flagship motorcycle brand, continued its dominance in the mid-size motorcycle segment, posting its highest-ever quarterly sales of 2,69,039 motorcycles, a 17 per cent increase from the 2,29,214 units sold in Q3FY24. CEO Govindarajan attributed the growth to strategic launches and operational optimisations.

Stock performance and outlook
Following the brokerage revision, Eicher Motors’ stock is now over 10 per cent below its all-time high of Rs 5,551.75, recorded on February 4, 2025. Despite the recent drop, the stock remains up over 35 per cent from its 52-week low of Rs 3,675 in March 2024. The company’s long-term outlook remains positive, with analysts expecting sustained demand to support future growth.