Buy Eicher Motors Stock With A Potential Upside Of 20%

Sharekhan, a leading brokerage company, gives a buy rating to Eicher Motors with potential returns of 20% with a target price of Rs.4100 in one year. Eicher Motors Limited is a leading manufacturer in the segment of premium motorcycles and also owns the Royal Enfield brand. The stock has been surging for the past few days, and it has the potential to go 20% more from this price, as per the reports of Sharekhan.

Eicher Motors Limited Stock Outlook

Eicher Motors is an Indian multinational company that manufactures commercial vehicles and motorcycles. The company's market capitalization is Rs. 93 562 Crore, and the stock's current market price is 3,421. The stock's all-time high is Rs. 3,512, which is near its all-time highs recently. According to Sharekhan, the stock has the potential to cross its all-time high and give a 20% potential upside from the current market price.

Returns of Eicher Motors in 5 years

The stock has been giving good returns recently; it has reported over positive 2.29% in the past week and 9.96% in the past month. Eicher Motors has also recorded good returns in the long term, with a positive return of 26% in the past three months and 25.56% in the past year. The returns remain highest in 3 years, with a positive upside of 110.97%; however, in 5 years, the return is 7.96%.

Company and Valuation Outlook

The company is looking good and is poised to recover strongly, putting performance in top gear as mentioned in the reports. As per the reports of Sharekhan, "Coverage on the stock with a Buy rating and a 12-month PT of Rs. 4,100 by valuing the business at 28x its rolling-forward September 2024E EPS." However, the valuation mentioned is yet to catch up with the expected performance.

Key triggers for good performance of the stock in recent future

As the report of Sharekhan says, the Export business of Eicher Motors is on a long-term growth track. Royal Enfield recently launched Hunter 350 and is planning to launch new pipelines, and the two-wheeler industry space has been looking good recently. The stock can achieve its target given its recent improvement in the two-wheeler division and increased market size.

Key risks on Eicher Motor Call from Sharekhan

As per the report, the performance of stock might be impacted if the chip shortage aggravates the expectation. Another reason for the impact on performance might be if Royal Enfield fails to launch the new models. For some reason, Royal Enfield may see a downfall which may affect the price of Eicher Motors.