Eicher Motors (BUY): Strong margin performance in a weak environment - AMBIT

Eicher Motors' 2QCY13 consolidated results were significantly ahead of our expectations, owing to the higher-than-expected margins in both the motorcycle (Royal Enfield - RE) and the commercial vehicle business (Volvo Eicher Commercial Vehicles - VECV). Whilst consolidated EBITDA was ahead of our expectations by 51bps, absolute EBITDA exceeded our expectations by nearly 8%. With RE continuing to buck the weak industry demand trend, with the new RE plant coming on stream recently and with strong margin performance in 2QCY13, we retain our BUY stance.

Source : Equity Bulls

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