Morgan Stanley equalweight on Eicher Motors, target price Rs 17,052

Morgan Stanley has an equalweight rating on Eicher Motors in the long term with a target price of Rs 17,052. Shares of Eicher Motors ended up 2.2% at Rs 20,324.95 on Thursday while the BSE sensex closed 634.61 points (1.55%) up at 41,452.35.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 2171.54 crore, down -8.03 % from last quarter sales of Rs 2361.24 crore and down -9.34 % from last year same quarter sales of Rs 2395.22 crore. The company has reported net profit after tax of Rs 564.39 crore in the latest quarter.

The company’s top management includes Mr.Inder Mohan Singh, Mr.S Sandilya, Mr.Siddhartha Lal, Mr.Vinod Aggarwal, Mr.Vinod K Dasari, Ms.Manvi Sinha. Company has S R Batliboi & Co. LLP as its auditors. As on 30-09-2019, the company has a total of 27,289,722 shares outstanding.


Investment Rationale

The brokerage believes that the share price of Eicher Motors will fall relative to the country index over the next 30 days. Royal Enfield will see 7-9% material BS-VI related price hike, said Motilal Oswal. High customer acquisition costs will keep volumes muted for coming months, said Motilal Oswal. The brokerage also expects weak numbers for FY20 Q3 from Eicher Motors.