Eicher Motors Surges 4% on UBS Green Flagging on Buy for Decent Performance

Eicher Motors

It is also projected that Eichers’ average selling price will outperform the industry, given the debut of its new 450cc platform and many 650cc launches. Eicher Motors Limited shares soared more than 4% in morning trade on March 20 after global stockbroker UBS upgraded its rating to ‘buy’ with a potential upside of up to 35%, citing the company’s new launches and weak performance from peers.

At 9.50 a.m., Eicher Motors stock traded at Rs 3,863, up 4% from the previous closing. UBS analysts have boosted Eicher Motors’ price objective to Rs 5,000, representing a 34.5 percent increase from the previous closing.

Despite being aggressively priced, Harley Davidson and Bajaj Auto’s victory releases did not considerably improve volume. As of February 2024, Harley and Triumph’s total volume of models launched was roughly 4,000 units, significantly below the planned guideline.
UBS says that despite competitors entering the market to threaten Eichers’ dominance, none have been able to significantly damage customers. Rivals have sought to outdo Royal Enfield with superior specifications and aggressive pricing, but have been unable to match its qualitative and emotive edge. “These aspects are challenging for competitors to replicate.”

According to SIAM data, the company’s market share in the premium motorcycle class has increased despite competition. In Q2FY23, it had a market share of 42%, which climbed to 45% in Q3FY24.
Not only that, but the company intends to launch a new bike, the Roadster. Analysts anticipate that the introduction will close the performance gap previously observed when compared to Harley Davidson and Triumph.This new model delivers industry-leading performance, particularly with Royal Enfield’s first liquid-cooled engine, which is expected to solve concerns about engine heating in hot weather and heavy traffic.”We believe the upcoming 450cc roadster, potentially followed by additional body forms, will stimulate replacement demand among Royal Enfield’s 350cc customers.” , UBS wrote in a letter to clients.