Eicher Motors (EML) is the market leader in the >250 cc premium motorcycle segment (market share ~85%+) through its aspirational models under the Royal Enfield (RE) brand, such as Bullet, Classic, Interceptor among others.
Eicher posted a mixed performance in Q3FY23
EML price has grown ~4% CAGR over last five years (from ₹2,732 levels in Feb 2018), in line with the broader Nifty Auto index.
Introducing FY25E, we value EML at ₹ 4,065 on SOTP basis (i.e., 30x PE to RE business & 30x PE to VECV business on FY24-25E average)
In our auto OEM coverage, we also like M&M.
|Key Financials||FY20||FY21||FY22||5 year CAGR (FY17-22)||FY23E||FY24E||FY25E||3 year CAGR (FY22-25E)|
|EBITDA Margins (%)||23.8||20.4||21.1||0.0||23.7||24.5||25.4||0.0|
Q3FY23 Earnings Conference Call highlights
In the CV domain, it expects a price hike of ~3%-5% due to upcoming OBD Phase 2 norms from April, 2023 & has technologies available for same.
On export front company continued to build upon brand building, retail channel expansion & new CKD facilities.
Company during the Auto Expo 2023 company showcased future ready mobility technologies like BEV, Fuel Cell, CNG/LNG, EV Bus (13.5 m) in CV space.
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