EICHERMOT - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.3

🏍️ Fundamental Analysis: Eicher Motors Ltd. (EICHERMOT)

Eicher Motors, the parent of Royal Enfield, is a premium player in the two-wheeler segment with strong brand equity, robust financials, and consistent growth. Its fundamentals suggest a solid long-term investment case, especially for investors seeking quality and stability.

Metric Value Implication

P/E Ratio 31.7 Fairly valued vs. industry PE of 31.1

PEG Ratio 0.77 Attractive — growth is reasonably priced

ROCE / ROE 29.8% / 24.1% Excellent — strong capital efficiency

Dividend Yield 1.28% Decent — adds to shareholder value

Debt-to-Equity 0.02 Virtually debt-free — strong financial health

EPS ₹173 Strong earnings base

Qtr Profit Var +27.2% Solid growth momentum

FII/DII Holding Change +0.80% / -0.88% Mixed sentiment — FII buying is encouraging

📉 Technical Analysis

Current Price: ₹5,470

DMA 50 / DMA 200: ₹5,506 / ₹5,209 → Mildly bearish crossover; consolidation phase

RSI: 44.8 → Neutral to slightly oversold — potential for bounce

MACD: -27.3 → Bearish divergence — short-term weakness

Volume: Below average — low conviction in current price action

💰 Ideal Entry Price Zone

₹5,200–₹5,350

This zone aligns with 200-DMA support and offers a good valuation entry

Avoid fresh entry above ₹5,600 unless momentum and volume improve

📈 Long-Term Investment Outlook

Strengths

PEG < 1 — undervalued growth

ROCE and ROE among the best in auto sector

Debt-free — strong balance sheet

Consistent profitability and brand strength (Royal Enfield)

Risks

MACD and RSI suggest short-term weakness

DII trimming — possibly due to sector rotation

High dependence on premium motorcycle segment — cyclical exposure

Eicher Motors is a high-quality auto compounder with strong fundamentals and reasonable valuation. Ideal for long-term investors seeking exposure to premium mobility and brand-driven growth.

🏁 Exit Strategy / Holding Period

If you already hold EICHERMOT

Holding Period: 3–5 years to benefit from premium segment expansion and export growth

Exit Strategy

Consider partial profit booking near ₹5,900–₹6,000 (recent high)

Reassess if ROCE drops below 20% or PEG rises above 1.5

Hold if earnings growth continues and valuation remains reasonable

Would you like a comparison with Bajaj Auto, Hero MotoCorp, or TVS Motor to explore relative performance and valuation in the two-wheeler space?

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