Eicher Motors shares are up nearly 7% ignoring the fear among some analysts

While the spike in profit margin was encouraging, analysts at JPMorgan highlighted that the company needs to show an increase in sale volumes (of the Royal Enfield range of bikes) for the stock valuation to sustain at current levels. Eicher Motor shares are up over 12 percent this year so far.

Last fiscal, Royal Enfield registered the highest-ever motorcycle sales at 834,895 units, up 38 percent from 602,268 units in FY22.

Morgan Stanley, on the other hand, is afraid that the Siddharth Lal-led company may lose margin to an increase in competition. The US-based investment bank expects Eicher shares to hit Rs 3,553 any time in the next 12 months. But it cut its estimate for the price to earnings multiple -- a valuation metric that looks at the money paid for every additional rupee of profit -- to 23 times, compared to 27 times, which was the average for the last 10 years.

Jefferies, New York-based broking firm, is more sanguine about Eicher's prospects. The analysts expect sales to improve as overall two wheeler demand in India improves.