Result Update: Eicher Motors Limited (EML) - ACCUMULATE - TP Rs.27203 - Kotak

EML's 4QFY17 reported numbers were on expected lines. Strong 21% volume growth resulted into 23% YoY growth in consolidated revenues. EBITDA margin at 31% was almost similar QoQ, but higher YoY. Consolidated PAT grew by 33% YoY. Profit from VECV JV jumped multifold YoY. Currently, Royal Enfield (RE) is facing capacity issue and hence sequential volume growth has been low. New plant will commence production from August 2017 and we thereby expect sales volume to improve in 2HFY18. VECV operational performance during the quarter was strong - despite challenging environment. We revise our FY18 lower to align our sales volumes with production guidance given by the company. We also introduce FY19 estimates and roll-over our target to FY19E financials. We raise the target price on the stock to Rs27,203 (earlier Rs24,164) and upgrade the stock to ACCUMULATE (earlier REDUCE).

Shares of EICHER MOTORS LTD. was last trading in BSE at Rs.29402.1 as compared to the previous close of Rs. 27851.75. The total number of shares traded during the day was 10485 in over 4365 trades.

The stock hit an intraday high of Rs. 29983 and intraday low of 27850. The net turnover during the day was Rs. 306106850.

Source : Equity Bulls

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