EICHERMOT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | EICHERMOT | Market Cap | 1,95,010 Cr. | Current Price | 7,109 ₹ | High / Low | 8,233 ₹ |
| Stock P/E | 39.2 | Book Value | 701 ₹ | Dividend Yield | 0.98 % | ROCE | 31.7 % |
| ROE | 25.1 % | Face Value | 1.00 ₹ | DMA 50 | 7,166 ₹ | DMA 200 | 6,821 ₹ |
| Chg in FII Hold | -0.24 % | Chg in DII Hold | 0.09 % | PAT Qtr | 1,333 Cr. | PAT Prev Qtr | 1,208 Cr. |
| RSI | 49.6 | MACD | 7.55 | Volume | 5,66,675 | Avg Vol 1Wk | 5,06,450 |
| Low price | 5,201 ₹ | High price | 8,233 ₹ | PEG Ratio | 1.00 | Debt to equity | 0.01 |
| 52w Index | 62.9 % | Qtr Profit Var | 26.2 % | EPS | 180 ₹ | Industry PE | 31.2 |
Financials & Valuation:
EICHERMOT shows strong fundamentals. ROCE (31.7%) and ROE (25.1%) highlight excellent efficiency in capital utilization. EPS of 180 ₹ and quarterly PAT growth (1,333 Cr. vs 1,208 Cr.) demonstrate robust profitability. Debt-to-equity is extremely low at 0.01, ensuring financial resilience.
Valuation Indicators:
P/E ratio of 39.2 is slightly above the industry average (31.2), but justified by strong earnings growth. Book Value is 701 ₹ compared to the current price of 7,109 ₹, reflecting premium valuation. PEG ratio of 1.00 suggests fair valuation relative to growth. Dividend yield of 0.98% provides modest income support.
Business Model & Health:
EICHERMOT, through Royal Enfield and commercial vehicles, enjoys strong brand equity and competitive advantage in premium motorcycles. Consistent profitability, low leverage, and strong demand trends reinforce overall health.
Entry Zone & Holding Guidance:
Technically, support lies around 7,050–7,150 ₹, with resistance near 7,800–8,000 ₹. Entry near support levels is favorable for swing trades. Long-term holding is recommended given strong fundamentals, brand strength, and industry growth.
Positive
- Strong ROCE (31.7%) and ROE (25.1%).
- EPS of 180 ₹ with consistent profit growth.
- Very low debt-to-equity (0.01).
- Premium brand positioning in motorcycles.
Limitation
- P/E ratio (39.2) above industry average (31.2).
- FII holdings declined (-0.24%), showing reduced foreign confidence.
- Current price trades at a premium to book value.
Company Negative News
- Minor decline in FII holdings.
- Valuation slightly stretched compared to peers.
Company Positive News
- Quarterly PAT improved to 1,333 Cr. from 1,208 Cr.
- DII holdings increased (+0.09%), showing domestic support.
- Strong demand momentum in premium motorcycles.
Industry
- Automotive sector benefits from rising demand for premium motorcycles and commercial vehicles.
- Industry PE (31.2) supports fair valuation benchmarks.
- Long-term growth driven by urbanization, rising incomes, and export opportunities.
Conclusion
EICHERMOT is fundamentally strong with excellent profitability, low debt, and strong brand equity. Entry near 7,050–7,150 ₹ offers favorable risk-reward. Long-term investors can hold confidently, supported by industry growth and consistent earnings.
Would you like me to also prepare a peer benchmarking overlay comparing EICHERMOT against Hero MotoCorp and Bajaj Auto, so you can see relative positioning within the two-wheeler industry?