Existing investors should hold on to Eicher Motors' stock for long-term gains: Mayuresh Joshi

In a chat with ET Now, Mayuresh Joshi, Fund Manager, Angel Broking, shares his view on Eicher Motors.

ET Now: The Reserve of India (RBI) has raised the foreign institutional investor (FII) investment limit for Eicher Motors to 49 per cent. My question to you is, irrespective of the near-term impact that this FII investment limit hike would have, do you believe in the long-term story? The scrip has so far performed pretty well. But, does one continue to hold it or is it time to book profits?

Mayuresh Joshi: Absolutely. One should continue holding on to the Eicher Motors' stock. It is a dual story, which is playing exceedingly well for Eicher Motors.

The two-wheeler segment has been performing well; the capex that the company incurred in the past, would probably cut down the waiting time for delivery of two-wheelers. On the other hand, the commercial vehicle (CV) segment has been resilient even in bad times.

The discount levels have been coming down for the industry as a whole. The volume growth that is probably coming through, of late, should aid the CV business of Eicher Motors.

Therefore, on a consolidated basis, our take is that Eicher Motors' numbers should be extremely good. Once the inventory levels probably start coming down, we will see volume growth coming back for the two-wheeler business. The CV cycle is probably improving. So, the consolidated EBITDA margins should inch up gradually. We remain extremely optimistic on Eicher Motors and existing investors should definitely hold on to the stock.