Shares of Eicher Motors rallied over 4 percent in trade Tuesday and was the top gainer on NSE Nifty 50 after foreign brokerage firm Jefferies raised the target price on the stock to Rs 4,150, estimating a 23 percent upside going ahead. The brokerage believes that it is a good time to buy given alleviating competitive concerns.
Jefferies said that in 2023 there was a lot of rising competitiveness across the board that weighed on the stock due to which the stock underperformed the auto index. Eicher Motors has been lagging the Nifty Auto Index by 24 percent.
Despite fresh competition, Jefferies said that channel checks suggest limited impact on the company and it is a good time to buy because the stock price has fallen and they have alleviated all competitive concerns.
Further, the brokerage noted that two-wheeler demand is recovering, industry premiumisation is picking up and exports are also picking up.
Jefferies expects the company's EBITDA or Earnings Before Interest, Taxes, Depreciation, and Amortization and earnings per share (EPS) to rise 62 percent and 81 percent, respectively, over FY23-26.
Eicher Motors stock
In terms of technicals, the 14-day relative strength index (RSI) of Eicher Motors stock stands at 49.7, signaling it's trading neither in the overbought nor in the oversold zone. The stock has a beta of 0.9, indicating low volatility in a year. Eicher Motors stock is trading higher than the 5 day, 20 day, 50 day and 100 day and 200 day moving averages.
Eicher Motors' shares rose 4.37 percent intraday to Rs 3,530 against the previous close of Rs 3,382 on NSE. The stock opened higher at Rs 3,405.05 on NSE today.
In the last one year, the stock has gained around half a percent, underperforming the Nifty 50, which has gained over 15 percent in the same period.
First Published: Sept 26, 2023 10:33 AM IST
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