Eicher Motors gains 1.5% as stock is expected to see re-rating
Further, the brokerage sees a limited impact on Royal Enfield from recent competitive launches.
![Eicher Motors gains 1.5% as stock is expected to see re-rating](https://cdn.zeebiz.com/sites/default/files/2023/11/30/270825-untitled-design-77.png?im=FitAndFill=(1200,900))
Shares of Eicher Motors in the morning trade gained as much as 1.5 per cent to the day's high of Rs 3,870 apiece, as the company has been ranked in Jefferies 'buy' list. In a month, the stock has gained 15 per cent as against Nifty Auto, which has climbed over 9 per cent during the same period.
The global brokerage Jeferries has maintained a buy rating on the counter and has set a target of Rs 4,650, implying a potential run-up of over 20 per cent. The company's Royal Enfield annual biking festival in Goa and management interaction at the event increased confidence in RE’s brand appeal and community connection. Further, the brokerage sees a limited impact on Royal Enfield from recent competitive launches.
Additionally, Jefferies sees re-rating potential in the counter as confidence in respect of long-term market share sustainability rises. Also, the brokerage sees Eicher to benefit amid tailwinds of two-wheeler demand recovery, the potential to expand exports, and premiumisation. The brokerage expects the company's EBITDA and EPS to rise by 68 per cent and 86 per cent, respectively.
Earlier, Geojit Financial Services also maintained a 'buy' view on the stock with a target price of Rs 4,333. The brokerage maintained that, with product launches, new retail formats, market share gains, and increased government spending on infrastructure, the company is poised for growth. "We expect margins to improve due to price hikes and a favourable product mix," the brokerage added.
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