InvestorQ : Most of the auto companies are giving bad results. How are Eicher results and can I buy the stock after the quarter results?
Khushi Patel made post

Most of the auto companies are giving bad results. How are Eicher results and can I buy the stock after the quarter results?

Answer
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Anjana Aiyar answered.
1 year ago


Eicher Motors has grown its quarterly profits by 18% to Rs.545 crore in the March end quarter. However, the total revenues of the company were flat with just a 1% growth to Rs.2500 crore. The EBITDA or the operating profits of the company fell by 14% to Rs.685 crore on a YOY basis. There was pressure on the volumes of motor cycle sales. For example, the sales of Royal Enfield bikes were down by 13% at just Rs.197,567 crore in the quarter.

If you have a long term perspective then you can buy this stock. The stock has corrected more than 35% in the last one year along with the other auto stocks. But this also meant that the valuations have become more reasonable. The stock is now available at around 28 times P/E ratio, which is one of the most reasonable at which it has quoted. It is a good time to accumulate this stock because it operates in the premium two wheeler spaces and that is not too vulnerable to demand cycles. Hence the impact will not be as hard as Bajaj or Hero Motor or TVS. Take a 1 year view and buy this stock.