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Eicher Motors Ltd. – Fairness Analysis DeskInsights


Eicher Motors Ltd. – Made Like a Gun

Eicher Motors Restricted (EML), included in 1982, is the listed flagship firm of the Eicher Group in India and a number one participant within the Indian car trade. On a standalone foundation, EML manufactures and markets bikes below the long-lasting Royal Enfield model, with its manufacturing amenities based mostly in Chennai, Tamil Nadu. Moreover, the corporate operates as a holding firm for investments in VE Business Autos Restricted.

A three way partnership of EML (54.4%) and AB Volvo (45.6%), VECV got here into existence with impact from July 1, 2008. The JV is engaged in EML’s truck and bus operations, auto parts enterprise and technical consulting providers enterprise, and Volvo Group’s Indian truck gross sales and advertising features, in addition to service and spares community operations for each Volvo vehicles and buses.

Valuation:

The corporate continues to increase its addressable market by way of growing its distribution community, new product launches, and personalization initiatives by way of the ‘Make it Yours’ (MIY) platform. VECV can also be anticipated to see a cyclical restoration in volumes and earnings because the CV trade recovers. At CMP, the inventory trades at 34x of FY24E EPS. We suggest a BUY score within the inventory with a goal worth (TP) of Rs.3725, 40x FY24E EPS.

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