Eicher Motors share price jumps 10% as company’s 1:10 stock split comes into effect

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August 24, 2020 11:03 AM

Eicher Motors shares were trading 7.79 per cent higher at Rs 2,341 apiece, as compared to a 0.51 per cent rise in the benchmark S&P BSE Sensex

eicher motors, eicher motors share priceOn June 12, the board of directors of the company approved the sub-division of equity shares of the company from the existing one equity share of the face value of Rs 10 each

Eicher Motors share price jumped 10 per cent to Rs 2,389 apiece on BSE as stock split comes into effect from today. The stock turned ex-date for the stock split on Monday in the ratio 1:10. According to a BSE exchange filing, the company has fixed August 25, 2020, as the record date for the stock split. On June 12, the board of directors of the company approved the sub-division of equity shares of the company from the existing one equity share of the face value of Rs 10 each into 10 equity shares of the face value of Re 1 each.

Around 10.45 AM, Eicher Motors shares were trading 7.79 per cent higher at Rs 2,341 apiece, as compared to a 0.51 per cent rise in the benchmark S&P BSE Sensex. The total market capitalisation of the company stood at Rs 63.94 lakh crore at the time of writing this report. In today’s trade, the stock opened at 2,219 and hit the day’s low of Rs 2,197.75 apiece. “FY21 would be another challenging year for the domestic 2W industry as well as for Eicher Motors due to the COVID-19 pandemic and its impact. As a result, along with volume pressure, Royal Enfield production will also be at higher risk due to its singular location unlike other OEMs, which have plants located in multiple locations,” analysts at Motilal Oswal Financial Services said in a report.

Eicher Motors reported a net loss of Rs 55.18 crore in the April-June quarter. The company had posted a net profit of Rs 451.77 crore in the corresponding quarter of the preceding year. “Covid-19 has impacted the normal business operations of the group by way of interruption in production and supply chain during the lock-down period,” the company said in a regulatory filing.

The research and brokerage firm Motilal Oswal also said that technical parity with other high-end motorcycles, strong product pipeline and network expansion in both domestic and export market has equipped RE to capture the benefit of the upcoming favorable product cycle. “We believe BS6 transition would be an inflection point for RE as a completely new improved platform could drive revival of the brand,” it added, maintaining a ‘buy’ rating to the stock.

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