Eicher Motors is the top Nifty 50 gainer, here’s why analyst sees nearly 30% upside in stock

After Eicher Motors beat CNBC-TV18 poll estimates on all parameters — revenue, profit, EBITDA and margin — brokerages reiterated their belief in the automaker’s long-term growth story.

Jefferies, with a buy call and target price of ₹4,650, noted that the confidence in the firm’s long-term market share sustainability has risen. Morgan Stanley, which has an equal-weight stance on stock and a target price of ₹3,552, pointed to its new models and platforms’ focus on growth in the long run.

Eicher Motors shares were trading 2.34% higher at ₹3,663 on the NSE at 9:50 am. In 2023 (year-to-date), the stock has given a return of 13% to investors as against the benchmark Nifty 50 which rose about 7% during the period.

However, Jefferies pointed out that despite the strong operating performance, the stock has lagged Nifty Auto by 20% in 2023 as competitive concerns weighed on valuations.

As Royal Enfield sold 2,29,496 motorcycles in the second quarter, an increase of 13% from 2,03,451 motorcycles sold in the same period of last fiscal, Jefferies said it sees limited impact from the launches of Triumph and Harley.

In fact, Jefferies sees potential for re-rating given the tailwinds of two-wheeler demand recovery and premiumisation, it said.

Morgan Stanley, also noted that during the quarter under review, RE launched the new Bullet 350, which the management has said is receiving good traction. The firm is also targeting the launch of Bullet in international markets over the next few months, the brokerage said.