Eicher Motors - March 2013 Results Preview - Motilal Oswal

- Expect Royal Enfield volumes to improve 43% YoY (+6.4% QoQ) given continued demand momentum. Expect standalone margins at 12.8% (-110bp YoY, +130bp QoQ).

- Expect VECV's volumes to drop 14.3% YoY (+4.5% QoQ) due to economic weakness and consequent lower freight traffic. VECV's margins are likely to improve 90bp QoQ on higher volumes.

- Expect consolidated sales to grow 2.2% YoY (+6.5% QoQ), margin to improve 70bp QoQ to 8.0%, and PAT (after minority interest) to decline 20% YoY on lower profits from VECV.

- We have cut our CY13E/CY14E/CY15E EPS by 3.2%/6.7%/5.8% respectively.

- The stock trades at 22.4x/15.7x/11.5x CY13E/CY14E/CY15E EPS respectively. Maintain Buy.

Source : Equity Bulls

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