Emkay Global Financial's research report on Eicher Motors
EIM delivered a strong beat on margins (+150bps QoQ to 24.5% vs. our estimate of 23.5%) and PAT, driven by the ~250bps higher gross margins (on lower RM costs, better pricing and a more profitable mix). For EIM, structural domestic franchise revival (with the response to Hunter distinguishing EIM as a serial winner and given the slew of other planned launches) and ramp-up in exports (post many years of seeding), along with better mix and softer commodity prices would drive ~25% FY23-25E EPS CAGR (refer our recent 2W note).
Outlook
We upgrade FY24E EPS by ~11% and retain BUY, with ~18% upside; our SOTP-based TP at Rs4,000/sh (Rs3,590 earlier) is based on 25x PER/20x PER for the motorcycle/CV business, on FY25 estimates.
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