The two-wheeler major posted a consolidated net profit attributable to owners at Rs 1,420 crore for Q3FY26, compared with Rs 1,171 crore in the same period last year. Revenue from operations rose 23% to Rs 6,114 crore, up from Rs 4,973 crore a year ago.
Jefferies, with a Buy call and the highest target price on Eicher Motors at Rs 8,800, said volume growth has been supported by focused marketing and product initiatives following a period of heightened competition from Harley and Triumph, as well as challenges related to product upgrades. The brokerage noted that growth has rebounded strongly, accelerating to 14% in 2HFY25 and further to 30% in 10MFY26.
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Export performance has also remained robust, rising 32% YoY during April–January after a 36% increase in FY25. Jefferies expects volumes to grow 23% in FY26, followed by a 12% CAGR over FY26–28E.
The brokerage added that despite new competition emerging in 2023 from Hero-Harley and Bajaj-Triumph — with recent monthly sales ranging between 1–6K units compared with Royal Enfield’s average of 92K units per month in 10MFY26 — the company appears to have navigated the competitive phase effectively, strengthening its long-term market share outlook.
Citi Research (Buy rating) raised its target price to Rs 8,300 from Rs 8,200 and remains positive on Eicher Motors’ outlook, highlighting the company’s announced capacity expansion and expectations of continued demand momentum in Q4 along with high single-digit YoY growth in domestic industry volumes in FY27. The company has outlined a Rs 9.8bn investment plan to expand annual capacity from 1.45mn units to 2mn units by FY28E, with a primary focus on the 350cc portfolio. Citi has made minor revisions to its estimates, slightly increasing revenue projections for Royal Enfield on the back of improved pricing. EBITDA estimates have been raised by 2–3% over FY26–28E to reflect operating leverage benefits, while EPS has been revised up by 1–2% despite higher depreciation from the capacity expansion.“We believe Eicher is well-placed in terms of near-term growth driven by strong momentum in the domestic market, especially post-GST rate cut amidst the premiumisation trend and refresh launches. We built in a 12% volume CAGR for Royal Enfield over FY26-28. Additionally, we are positive on the CV cycle which should bode well for VE commercial vehicles (VECV) and hence we forecast mid-teen volume growth in FY27,” CLSA, with an Outperform rating and a target of Rs 8,066, said.
For VECV, CLSA said the commercial vehicle industry is in an upcycle on the back of improving freight rates, improving freight utilisation, a cut in the GST rate which lowers upfront cost and an increase in freight movement, should add to the overall value of the company.
Macquarie, with a target price of Rs 7,479, maintained its Neutral call on the stock. “We regard Eicher as a beneficiary of the GST rate reduction, and we think the stock will do well in the near term, given solid earnings delivery. However, we believe upside potential is capped with 13% FY27E domestic volume growth and current stock multiple (core basis) at 31x FY27E EPS.” the international brokerage said in a note.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)