Why JPMorgan remains bearish on Eicher Motors stock despite May sales rise

Notably, JPMorgan did highlight that the Hunter model continues to see a good response, and 35 percent of buyers are under 25 years. According to a brokerage note by Emkay Wealth Management,  after the launch of the Hunter, Royal Enfield has emerged as the segment leader with a 31.8 percent share in FY23 (fourth quarter FY23 exit share at 34.2 percent), largely at the cost of Bajaj's Pulsar.

Additionally, on Friday, June 2 Eicher Motors said that the company was starting operations of its exclusive local assembly unit and CKD (completely knocked down) facility in Nepal.

Located in Birgunj, the new facility is Royal Enfield's fifth CKD assembly unit in the world — after Brazil, Thailand, Colombia, and Argentina — in addition to its manufacturing and ancillary facilities located in Tamil Nadu, India.

With an assembly capacity of 20,000 units per year, the local assembly unit in Birgunj is a hi-tech facility spread over one lakh square feet that will cater to growing demand in the country.

To begin with, the facility will engage in the local assembly of the new Classic 350 and the Scram 411. With this setup, Royal Enfield is committed to a seamless purchase process for its motorcycles in Nepal as well as to nurturing the growing middleweight segment in the country.

When it comes to auto sales in May, Eicher Motors' total commercial vehicle sales went up 11.6 percent at 6,289 units as compared to 5,637 units in May 2022. In Royal Enfield sales, the company posted a 22 percent year on year growth in total in May to 77,461 units. Total sales in May of last fiscal were at 63,643 units. The sales during the month, driven by domestic business, also topped Nomura's estimates of 76,000 units.