Eicher Motors - Stock Split - Company Update - ICICI Securities

The Eicher Motors (EML) scrip has undergone a stock split in the ratio of 1:10, i.e. 10 shares (of face value Rs. 1 each) for every one share (of Rs. 10 each) held earlier. The share capital base of 2.73 crore shares earlier now stands revised to 27.3 crore shares (unchanged in value terms at Rs. 27.3 crore). The corporate action is aimed at facilitating greater liquidity in the stock with the intent of augmenting the shareholder base. It will not result in any dilution in equity base, although per share metrics would change as a result of split.

Valuation & Outlook

For EML, we factor in 8.0%, 3.1% sales, PAT CAGR in FY20-22E. We await crystallisation of demand guidance into actual volumes before turning positive on the stock while any disappointment on that front could challenge current P/E multiples (near historical highs post sharp run up in recent months). We maintain HOLD rating, valuing the stock at Rs. 2,470 on an SOTP basis (35x P/E to RE; 20x P/E to VECV on FY22E).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_EicherMotors_CoUpdate_Aug20.pdf

Shares of EICHER MOTORS LTD. was last trading in BSE at Rs.2217.75 as compared to the previous close of Rs. 2176.85. The total number of shares traded during the day was 223900 in over 20549 trades.

The stock hit an intraday high of Rs. 2249 and intraday low of 2183.4. The net turnover during the day was Rs. 496105378.

Source : Equity Bulls

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