InvestorQ : I am holding shares of Eicher I bought at Rs.18,000 levels and the stock is sharply down from there. What should I do with the stock?
indhumathi Sayani made post

I am holding shares of Eicher I bought at Rs.18,000 levels and the stock is sharply down from there. What should I do with the stock?

Answer
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shrinidhi Rajan answered.
1 year ago


You are correct that the stock is down nearly 8% from your purchase price. You may also want to look at the results announced by Eicher on Wednesday. The company reported a 22% fall in net profits to Rs.452 crore on weak volumes even as total revenues were also down by 6% at Rs.2382 crore. The company has seen weak growth across most of its key segments including two wheelers and four wheelers. In fact, Royal Enfield volumes itself fell by 19% during the quarter.

On the operating front the margins fell sharply to 25.8%. This ratio used to be as high as 32% in the previous year. However, the stock price has corrected nearly 45% from the peak so this fall in operating margins is largely factored into prices. You do not need to worry about too much downsides from these levels and instead you can look to keep nibbling more at the stock at each fall in price.