SBICAP Sec retains sell on Eicher Motors, target price Rs 13,170

SBICAP Securities has retained sell rating on Eicher Motors in the long term with a target price of Rs 13,170. The stock ended flat Rs 17,999.20 on Monday while the BSE Sensex closed 141.33 down at 37,531.98. The equity and money markets were closed on Tuesday on account of Dusshera festival.

Company Financials

For the quarter ended 30-06-2019, the company has reported consolidated sales of Rs 2361.24 crore, down -4.00% from last quarter sales of Rs 2459.68 crore and down -6.72% from last year same quarter sales of Rs 2531.29 crore. The company has reported net profit after tax of Rs 430.92 Crore in the latest quarter.


Investment Rationale

Industry checks indicate supplies of Jawa motorcycles have been significantly ramped-up to 200/day, said SBICAP Securities. Eicher Motors' Royal Enfield's franchise is consistently deteriorating with growing ‘brand fatigue’ as evident from sharply declining same-store sales growth and steep share loss across markets, said SBICAP Securities.