Eicher Motors share price soars nearly 8% after Q2 results

Eicher Motors shares rose nearly 8% to ₹4,940 each in early trading on Thursday, 14th November. This increase followed the company’s strong Q2 results, primarily driven by higher sales of profitable motorcycles.

As a global leader in the middleweight motorcycle segment, Eicher Motors continues to perform well despite competition in the premium bike market. Analysts have responded positively, with many brokerage firms revising their ratings on the stock, providing investors with a compelling reason to invest in stocks like Eicher Motors.

Q2 earnings overview: Strong growth in revenue and profit

Eicher Motors’ Q2 FY 2024-25 report showcased impressive growth:

• Revenue: Eicher Motors achieved its highest-ever Q2 revenue from operations, reaching ₹4,263 crore, up from ₹4,115 crore in Q2 FY 2023-24.
• EBITDA: ₹1,088 crore, showing stability with a slight increase from ₹1,087 crore year-over-year.

• Margins: Flat at 26%, supported by strong sales of high-margin motorcycles.
• Profit after tax: Rose by 8.3% to ₹1,100 crore from ₹1,016 crore in the same period last year.

Surge in premium motorcycle sales: a promising sign for investors

Eicher Motors’ sales of higher-capacity motorcycles (above 350 cc), including popular models like the ‘Interceptor 650,’ soared by more than 36% year-over-year. These higher-margin motorcycles made up 15.3% of total sales, compared to 11.1% the previous year, marking a significant growth in this segment.

• Higher-capacity motorcycles: Increased demand among urban consumers for models with engine capacities above 350 cc.
• Lower-capacity motorcycles: Domestic sales for bikes with engine capacities up to 350 cc, such as the 'Hunter 350,' saw a 12% decline but still account for the bulk of Eicher's total sales.

This surge in the premium motorcycle segment reinforces the company's position in the premiumisation trend within the two-wheeler industry, presenting a promising opportunity for those looking to invest in stocks within this sector.

Expansion initiatives: new launches and international ventures

In Q2, Eicher Motors introduced two new motorcycles on its 650-Twin platform, the Bear 650 and the Classic 650, strengthening its premium offerings. Royal Enfield has also ventured into the electric mobility segment, debuting a new EV brand named ‘Flying Flea’—a strategic move aligning with evolving industry trends.

• International expansion: Established a new Royal Enfield flagship store in Dhaka, Bangladesh, and initiated a manufacturing and assembly unit in the country.
• Brazilian market: Plans to set up a second CKD unit in Brazil, expanding its reach in South America.

These initiatives demonstrate Eicher Motors’ strategic approach to broadening its international footprint and tapping into new markets, strengthening its appeal for those aiming to invest in stocks with global growth potential.

Key takeaways from Eicher Motors' Q2 performance

Eicher Motors’ recent results and strategic advancements reveal a promising outlook for the company:

• Robust quarterly performance driven by premium motorcycle sales
• Positive reception from major brokerage firms, with price targets as high as ₹5,500
• Strategic international expansion, particularly in South America and South Asia
• Launch of new high-capacity motorcycle models and entry into electric mobility

With Eicher Motors' consistent financial growth and expansion strategy, the company has established itself as a strong contender in the market. For investors considering a long-term opportunity to invest in stocks within the two-wheeler segment, Eicher Motors presents a compelling case.