Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

REDUCE on Eicher Motors - 'Meteor' to drive sales; valuations remain expensive - HDFC Securities

Posted On: 2020-11-18 03:03:24 (Time Zone: Arizona, USA)


Mr. Aditya Makharia, Institutional Research Analyst, HDFC Securities

Eicher reported 2QFY21 PAT at Rs 3.4bn (-34% YoY, up sharply QoQ). The OEM has rolled out the 'Meteor 350cc' on a new platform along with personalisation options (MIY), which is expected to be a 'differentiator'. The new launch comes at a time when the competition is increasing - the Honda H'ness CB350 has just been launched. We value the RE business at 23x PE, which is at a 25% premium to the mass market OEMs. The stock is trading at 43.7/29.8x FY21/22E. We set a revised Sep-22 TP of Rs 2,100 (we are raising our FY22/23E by 5%). Key risks: Faster-than-expected economic pick-up, encouraging response to new launches.

2QFY21 financials: Standalone: Volumes for RE at ~150k units declined 10% YoY. However, the realisations grew ~8% YoY to Rs 141k, owing to better product mix and price hike taken in Sep-20. Revenue at Rs 21.2bn declined 3% YoY. EBITDA margin at 22.8% was up sharply QoQ, (-220bps YoY). PAT declined 36% YoY to Rs 3.6bn, owing to a lower tax rate in the base quarter. Consolidated PAT declined 34% YoY to Rs 3.4bn. VECV: Volumes/revenue declined 28/13% YoY. Margin at 6.9% surprised positively due to higher realisation and cost savings. Loss reduced to Rs 70mn (vs a loss of Rs 1.2bn QoQ).

Call and other takeaways: (1) Meteor 350 launch: The newly launched Meteor has secured 8k bookings. As per management, the vehicle personalisation option (MIY) is a significant differentiator and has been well accepted by customers. RE plans to launch a revamped model on its new platform every quarter. (2) Demand pick-up: Expansion of studio stores (133 opened in 2Q, total ~770 stores) has led to demand penetration, especially in tier-II and III cities. Demand in urban cities is now picking up. Bookings in Oct-20 exceeded that of the previous year and currently stand at 125k units. (2) Supply chain constraints: While RE has a capacity of 1mn units, the OEM is facing constraints for specific models or due to bottlenecks from the vendor's side. The company produced 72k units in Oct-20. (4) CVs: VECV volumes were down 28% in 2Q (sharply higher QoQ). The industry is witnessing signs of improvement, led by a ramp-up in constructions/mining activities.

Shares of EICHER MOTORS LTD. was last trading in BSE at Rs.2545.8 as compared to the previous close of Rs. 2536.05. The total number of shares traded during the day was 54844 in over 4933 trades.

The stock hit an intraday high of Rs. 2563.05 and intraday low of 2494. The net turnover during the day was Rs. 138795140.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.


Other Headlines:

Maintain BUY on Cipla - Weak quarter, outlook promising - HDFC Securities

Maintain BUY on Larsen & Toubro - Growth returns - HDFC Securities

Escorts - Lowered demand guidance - HDFC Securities

Maintain ADD on Dr. Reddy's Labs - Sputnik V launch to lift near-term outlook - HDFC Securities

AU Small Finance Bank - Showcasing liability strength - cuts SA rate - ICICI Securities

Indigo Paints - The investments thesis is (nearly) intact - ICICI Securities

Greenpanel Industries - Strong growth momentum sustains - ICICI Securities

Aditya Birla Capital - Operating performance gathers momentum; company poised for RoE improvement - ICICI Securities

Dr. Reddy's Laboratories - Steady quarter; outlook intact - ICICI Securities

Cipla - Weak Q4; on track to sustain higher margins - ICICI Securities

Larsen & Toubro - Focus on margins and asset liquidation - ICICI Securities

Voltas - Q4FY21 Result Update - YES Securities

Mphasis - Q4FY21 Result Update - YES Securities

Dr Reddy's Laboratories - Q4FY21 Result Update - YES Securities

Sagar Cements Ltd - Q4FY21 Result Update - YES Securities

Greenpanel Industries Ltd - Q4FY21 Result Update - YES Securities

Larsen & Toubro Ltd - Q4FY21 Result Update - YES Securities

Balkrishna Industries - Growth momentum accelerates - ICICI Securities

Voltas - Healthy growth, uncertain outlook - ICICI Securities

Vedanta - Aluminium, Zinc India continue to drive earnings - ICICI Securities

Q4FY21 Result Update - SKF India - ICICI Direct

Q4FY21 Result Update - Sagar Cements - ICICI Direct

Q4FY21 Result Update - Dr Reddy's Laboratories - ICICI Direct

Q4FY21 Result Update - Dwarikesh Sugar - ICICI Direct

Q4FY21 Result Update - Indian Energy Exchange - ICICI Direct

Q4FY21 Result Update - Balkrishna Industries - ICICI Direct

Q4FY21 Result Update - Avadh Sugar & Energy - ICICI Direct

Q4FY21 Company Update - Vardhman Special Steel - ICICI Direct

Q4FY21 Result Update - Cipla Ltd - ICICI Direct

Q4FY21 Result Update - Larsen & Toubro - ICICI Direct

Q4FY21 Result Update - HG Infra Engineering - ICICI Direct

Q4FY21 Result Update - Escorts - ICICI Direct

Q4FY21 Result Update - Voltas Ltd - ICICI Direct

SKF India - Q4FY21 First Cut - ICICI Direct

Oberoi Realty - Q4FY21 First Cut - ICICI Direct

Maintain BUY on Mphasis - Large deal momentum continues - HDFC Securities

Maintain BUY on BSE - Regaining lost ground - HDFC Securities

Tata Power - Inline result; alternative to InvIT on cards - HDFC Securities

Maintain ADD on Voltas - Outperformance continues; margin beat inspiring - HDFC Securities

Retain BUY on Sagar Cements - Strong show - HDFC Securities

Q4FY21 Result Update - Apollo Tyres - ICICI Direct

Q4FY21 Result Update - Lupin - ICICI Direct

Q4FY21 Company Update - Mphasis - ICICI Direct

Dr Reddy's Laboratories - Q4FY21 First Cut - ICICI Direct

Anup Engineering - Q4FY21 First Cut - ICICI Direct

Q4FY21 Result Update - Pidilite Industries - ICICI Direct

Escorts Ltd - Q4FY21 First Cut - ICICI Direct

Jindal Stainless - Q4FY21 First Cut - ICICI Direct

Maintain BUY on Sonata Software - Growth visibility improves - HDFC Securities

Maintain BUY on KEC International - Near term challenges persist - HDFC Securities


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020