Shares of Eicher Motors rose as much as 3 percent to Rs 17,351 in Monday morning trade before losing gains as the stock reacted to Q4 financial results and brokerage recommendations.
On Friday, the Royal Enfield maker reported a 44.22 percent decline in profit-after-tax for the March ended quarter at Rs 304 crore.
Its consolidated total revenue from operations was at Rs 2,208 crore for the quarter against Rs 2,500 crore in the same period a year ago.
Royal Enfield had sold 1,63,083 motorcycles in the March-ended quarter, a 17 percent fall from 1,97,567 motorcycles sold in the corresponding period.
The company also announced that its board has approved split of its equity shares from the existing one equity share of face
value of Rs 10 each into ten equity shares of the face value of one rupee each.
After the results, brokerage firm Jefferies raised its price target on Eicher Motors to Rs 20,000 from Rs 17,500 as it expects the company to capitalise on the potential demand recovery.
Motilal Oswal maintained 'Buy' on the stock with a target price of Rs 19,700, however, it cut its FY21/FY22 EPS estimates by 29%/10% "to factor slower production ramp-up for RE and challenges in VECV volumes".
"EIM posted the lowest EBITDA margins in six years due to one-off costs, the impact of BS6 cost inflation, and op. deleverage. However, bookings have normalized, which is a positive surprise, although production ramp-up remains bottlenecked. New product launches would further aid demand," the brokerage said.
Meanwhile, ICICI Securities downgraded the stock to 'Add' from 'Buy' and revised price target from Rs 17,815 to Rs 18,078.