SP Tulsian believes that the strategic tie-up between Bajaj and Triumph will impact Eicher Motors going forward.
SP Tulsian, a renowned market analyst believes that the Eicher stock may see a lot of volatility in the next 12 months. According to him, the strategic tie-up between Bajaj and Triumph will impact Eicher Motors going forward. In conversation with CNBC TV-18, SP Tulsian said, “ Dominar is already giving a tough competition to Royal Enfield.” According to him, this competition is set to intensify in the coming days. The analyst said that the introduction of new models by Bajaj is set to induce correction in Eicher Motors stock. “Market’s response to new launches by Bajaj Auto may increase the volatility of the stock. The stock may correct by Rs 800 to 1,000 on each news of new launches.”
Eicher Motor shares fell by nearly 2% and was trading at Rs 30,911 shedding more than Rs 550 on Thursday morning. The Commercial vehicles maker has reported a 22.14% rise in consolidated net profit at Rs 459.62 crore for the first quarter ended 30 June 2017, in its quarterly results announced yesterday. The total consolidated income was up by more than 29% per cent to Rs 2,332.67 crore as against Rs 1,801.30 crore in the corresponding quarter of last fiscal. The shares lost value as the results were below consensus estimates. While the revenues were higher than the estimates, the profits came in 7% below an analyst poll.
Earlier, Royal Enfield maker Eicher Motors surpassed India’s market leading two-wheeler makers Hero MotoCorp and Bajaj Auto to become the country’s most valuable two-wheeler company and fourth most valuable automobiles manufacturer. On the news, Eicher Motors shares rose as much as 7.52% in one day. As per the BSE data, the market capitalisation of the diversified automaker stood at Rs 83,239.09 crore. About a decade ago, Eicher Motors’ value was just a fraction of both the other two-wheeler giants.
Last week, Raamdeo Agrawal of Motilal Oswal explained how Eicher Motors’ transformation from just being a truck maker to the Royal Enfield premium bikes story has helped the stock become a multibagger over the last five years. In conversation with ET Now, Agrawal said that he had bought Eicher Motors stock on the back of its truck sales, and believed in Royal Enfield only as backup. “In case the trucks do not sell, Royal Enfield will not allow us to sink,” he said while explaining his investment rationale.